Near infrared fluorescent dyes have a significant potential in biological applications. However, many of these organic dyes are hydrophobic and/or their fluorescence is quenched in aqueous media. Nanoparticle technology has been utilized to overcome the hydrophobic property of these dyes, but there remain problems in their fabrication. To overcome these problems, a novel fabrication technique for incorporating hydrophobic dyes in a biodegradable polymer nanoparticle has been developed. An infrared emitting dye (D1) and a two photon excitable fluorescent dye (BT101) were selected as prototypic dyes for incorporation. The D1 nanocrystal dye shows quenched emission in aqueous media. Upon encapsulation in a polymeric nanoparticle, its emission at 1.1 to 1.35 μm was recovered. BT101 dye doped nanoparticles demonstrated significant increase in fluorescent yield in aqueous media as compared to the free dye. In addition, several different sizes of BT101 doped polymer nanoparticles were fabricated (c.a. 35 nm to 100 nm in size). The fluorescence intensity was found to increase with the particle size. The investigation of uptake of BT101 nanocrystal and BT101 doped PLGA nanoparticles by culture cells revealed the importance of polymer coating of dye for efficient cell imaging.