Ultrasmall CdS nanoparticles were prepared by the size-selective photoetching technique. The smallest size of the CdS nanoparticles was obtained by the irradiation with the monochromatic light having the wavelength of 365 nm, while the absorbance of CdS nanoparticles monotonically decreased, for the whole wavelength, to null if the irradiation was performed using a wavelength less than 365 nm. The surface modification of CdS nanoparticles with thiophenol caused the red-shift of the absorption spectra due to the electric interaction between the bound thiophenol molecules and the CdS core, the degree being enhanced with a decrease in the particle size. 1H NMR signals of thiophenol bound on the surface of the smallest CdS nanoparticles prepared by 365-nm irradiation were shifted upfield compared to those obtained for the larger thiophenol-modified CdS nanoparticles prepared by the longer wavelength irradiation, and the signals appeared in positions similar to those of chemically synthesized CdS cluster molecules. The observation with transmission electron microscopy revealed that the smallest thiophenol-modified CdS nanoparticles had an edged pyramidal shape with a size of about 1.7 nm in contrast to the larger CdS nanoparticles of almost spherical shape. The particle size and chemical compositions of the smallest thiophenol-modified CdS nanoparticles roughly agreed with those of Cd32S14(SC6H5)36·4DMF, which has been reported to be one of the largest chemically synthesized CdS cluster molecules. The similarity between the emission and excitation properties indicated that the smallest thiophenol-modified CdS nanoparticles had the energy structure almost equal to that of Cd32S14(SC6H5)36·4DMF.