We synthesized CdS quantum dots (QDs) encapsulated within nth-generation hydroxyl-terminated poly(amidoamine) (PAMAM) dendrimers (Gn-OH) by coordination of Cd2+ ions and subsequent reaction with Na2S. We systematically examined the effects of Cd2+ ion/dendrimer ratio (x), generations of dendrimers, and temperatures on the resultant CdS QDs to elucidate the formation mechanism and to optimize the conditions for the encapsulation of QDs. The resultant QDs were analyzed by UV-vis spectroscopy, photoluminescence spectra spectroscopy, and transmission electron microscopy (TEM). Through a detailed analysis, we concluded that the first requisite for stable dispersions of CdS QDs with Gn-OH is to set x to be less than 2(n) because a Cd2+ ion is supposed to bind to two adjacent coordination sites of 2(n+1) outermost tertiary amines of a Gn-OH dendrimer. Further, we clarified that higher-generation dendrimers can confine smaller QDs because of denser surfaces. Finally a lower temperature is found to promote the coordination of Cd2+ ions with dendrimers, and accordingly suppress the nucleation outside the dendrimers which produces larger QDs. (C) 2012 Elsevier B.V. All rights reserved.