Highly photoactive merocyanine 540 is revealed to form charge transfer complex with zinc sulphide and cadmium sulphide nanocrystals confirmed by FT-IR Spectroscopy, Fluorescence emission and UV-Visible spectrophotometer. The semiconducting nanocrystals were synthesized by co-precipitation method and characterized by Fluorescence emission spectroscopy, UV-Visible spectroscopy, Scanning electron microscopy (SEM), X-ray spectroscopy and Energy dispersive X-ray spectroscopy (EDAX). Merocyanine, in different concentrations was chemisorbed on the surface of ZnS and CdS nanomaterial. ZnS and CdS nanoparticles were used in hybrid solar cells in combination with organic polymer. These cells performed good efficiency at (6 × 10−6 M) dye concentration. The decreased power conversion efficiency with short circuit current density below and above the optimal merocyanine concentration (6 × 10−6 M) may be due to aggregation of merocyanine dye on CdS nanocrystals and subsequent self-quenching phenomena among dye molecules. The power conversion efficiency of the devices fabricated from P3HT-CdS-MC540 was higher than devices fabricated from P3HT-ZnS-MC540 because of particle size effect.