In recent years, two-photon excited semiconductor quantum dots (QDs) have been the subject of intense investigation due to their long excitation wavelength which helps to achieve deeper penetration and higher image resolution in optical bioimaging. In this paper, water-soluble CdS QDs were synthesized using a hydrothermal method and applied to human liver hepatocellular carcinoma (HepG2) cells. The first-principles calculation suggested that the S-rich defected structure contributes to a narrower band gap compared to the pristine structure. The resulting fluorescence wavelength was significantly red shifted, which was attributed to the deep defect states emission. The large Stokes shifts (> 200 nm) of the QDs can eliminate the possible cross-talk between the excitation light and the emission light. Two-photon induced red fluorescence emission can avoid overlapping with the autofluorescence emission of biological samples. The uptake and cell viability measurements of the HepG2 cells showed a good biocompatibility and a low toxicity of CdS QDs. Two-photon excited scanning microscopy images revealed that the HepG2 cells incubated with CdS QDs emitted bright red upconversion fluorescence and the fluorescence brightness was 38.2 times of that of the control group. These results support CdS QDs as a good candidate for application in cellular imaging.