ZnS:Cd nanoparticles were synthesized in a reverse micelle system by controlling reaction factors with mercaptoacetic acid (MPA) as a surfactant and N,N-dimethylformamide as an oil phase. X-ray diffraction pattern shows that the ZnS:Cd nanoparticles exhibit a cubic structure and its mean size is calculated around 4nm. With different molar ratios of Zn2+/S2-, the relative intensity of the emission peaks at 400 and 556nm changes dramatically due to the more sulfur vacancies which resulted from the imbalance of Zn2+ and S2+ ions. Furthermore, hydrophobic phase-transferred ZnS:Cd nanoparticles were obtained using octylamine, and a highly luminescent phase-transferred ZnS:Cd/polyvinylpyrrolidone (PVP) nanocomposite was prepared by blending the phase-transferred ZnS:Cd with PVP. Infrared absorption suggests that octylamine has been successfully connected with the MPA-coated ZnS:Cd nanoparticles. Unlike the MPA-coated ZnS:Cd which has a very strong emission at 556nm, the phase-transferred ZnS:Cd has a strong emission at 435nm, which is ascribed to surface passivation and electron redistribution. In addition, luminescent intensity enhancement was observed for the phase-transferred ZnS:Cd/PVP nanocomposites with various Cd2+ doping concentrations.