Luminescent CdSe/ZnS QDs, with emission in the red region of the spectrum, were synthesized and encapsulated in poly(ethylene glycol)-poly(D,L-lactide) diblock copolymer micelles, to prepare water-soluble, bio-compatible QD micelles. PEG-PLA diblock copolymers were synthesized by ring opening polymerization of D,L-lactide, in the presence of methoxy PEG as a macro initiator. QDs were encapsulated with PEG-PLA polymers using a solid dispersion method in chloroform. The resultant polymer micelles, with encapsulated QDs, were characterized using various analytical techniques, such as UV- Vis measurement, light scattering, fluorescence spectroscopy, transmission electron microscopy (TEM) and atomic forced microscopy (AFM). The polymer micelles, with encapsulated QDs, were spherical and showed diameters in the range of 20-150 nm. The encapsulated QDs were highly luminescent, and have high potential for applications in biomedical imaging and detection.