We present density functional theory (DFT) structures and time-dependent DFT electronic excitation energies of several small CdSe nanoclusters with the composition CdnSen(n= 3, 6, 10, 13). We examine the effects on the geometries and excitation spectra of the nanoclusters induced by two chemical changes: peptide-binding and ligand passivation. We use cysteine (Cys) and cysteine-cysteine dipeptide (Cys−Cys) as model peptides and hydrogen atoms as surface-bound solvent ligands (or stabilizing agents). By comparing the results calculated for bare, hydrogen-passivated (CdnSenH2n), as well as the corresponding Cys- and Cys−Cys- bound clusters (CdnSen−, CdnSenH2n, −Cys, −Cys−Cys), we find that peptide-binding blue shifts the electronic excitations of bare nanoclusters, but red shifts those of hydrogen-passivated nanoclusters. The carboxyl oxygen and the sulfur atom tend to form a four-centered ring with adjacent two Cd atoms when the CdSe cluster forms covalent bonds with Cys or Cys−Cys. Further, this type of bonds may be distinguishable by significant red shifts of the excitation energies. [ABSTRACT FROM AUTHOR]