The effects of the stabilizing agent on the structural and luminescence properties of cadmium sulfide (CdS) nanocrystals have been investigated. Samples were prepared by chemical precipitation method using sodium hexametaphosphate (SHMP) and polyvinyl pyrrolidone (PVP). The structural and optical properties have been studied by X-ray diffraction (XRD), ultraviolet-visible (UV-Vis) absorption, photoluminescence (PL) and Fourier transform infrared (FTIR) spectroscopy. XRD patterns confirm the presence of cubic zinc blend crystal structure with space group F-43m. The results show the variation in crystallite size with change in surfactant. Blue shift in absorption edge as compared to bulk CdS is found. PL results represent broad and very intense red emission with smaller particle size due to modification of surface emitting states with surfactant.