Chemical action between cyclodextrins (CDs) and TOPO-(CdSe)ZnS quantum dots (QDs) generates a water-soluble solution of CD-QDs. Hydrophobic TOPO molecules on surface of the QDs are compatible to thread through the pockets of CDs and make the hydroxyl group on end of CDs to approach the ZnS surface, and then cause the interaction between ZnS and the hydroxyls. In this paper, Photoluminescence of the γ-CD-QD solution appeared about 15 nm of red movement compared with that of the QDs in hexane; 58% replacement of the crystal coordinate bond of Zn-S with that of Zn-O in the ZnS shell was demonstrated by using first-principles density functional theory and the red shift of the photoluminescence of CD-QDs; and –0.11eV of the energy gain of the exchange model was calculated by using an effective mass (EM) model. CD-QDs will provide water-soluble QDs with conjugational group for biology and molecule-device applications.