Semiconductor nanoparticles of cadmium sulfide were synthesized in ammonium perfluoropolyether (PFPE-NH4) stabilized water-in-CO2 microemulsions. The particle size was tuned by varying the water-to-surfactant molar ratio (w(o)): w(o) ratios of 5 and 10 yielded nanocrystals with exciton energies of 3.86 and 3.09 eV, corresponding to mean particle radii of 0.9 and 1.8 nm, respectively. These exciton energies are significantly higher than the bulk band gap energy for CdS (2.45 eV) due to quantum confinement effects. Effectively, w(o) controls the size of the compartmentalized water droplets in which the particles grow.