In this communication, biocompatible cadmium selenium quantum dots (CdSe QDs)–chitosan (CS) nanocomposites for fluorescence detection of nitric oxide (NO) are reported. The QDs–CS nanocomposites were generated by in situ synthesizing CdSe QDs in a CS aqueous solution, having spherical outline and an average dimension of 386.4nm. Almost all the CdSe QDs, with the dimension from 5 to 12nm, distribute well in the CS matrix. Many of the CdSe QDs are very close to the surface of the QDs–CS nanocomposites, in favor of the detection of NO. The QDs–CS nanocomposites are sensitive to NO molecules and can detect NO based on fluorescence quenching by NO, as evidenced by fluorescence microscopy and photoluminescence (PL) spectroscopy. The QDs–CS nanocomposites have potential biomedical applications owing to their low cytotoxicity.