Small crystallites of CdTe have been produced using a new solution synthetic method. In this technique, Cdl2 and Na2Te are each dissolved separately in methanol before rapid mixing. The product of this reaction is pure, stoichiometric CdTe with interesting electronic and optical properties. Photoluminescence studies of this material show a blue shift due to the quantum confinement, indicating the presence of small crystallites. Transmission electron microscopy confirms the presence of nanocrystals. Reaction temperature and processing conditions can be varied to change the crystallite sizes produced. This synthesis can also produce nanocrystalline HgTe.