Novel, water-soluble CdTe quantum dots (QDs) capped with β-cyclodextrin (β-CD) and ~ 4.0 nm in diameter were synthesized in aqueous solution, and characterized using transmission electron microscopy (TEM). A fluorescence-sensing system based on the photoinduced electron transfer (PET) of (mono-6-thio-β-CD)-CdTe QDs was then designed to measure the interaction of phenothiazine dyes [methylene blue (MB) and methylene green (MG)] with herring sperm DNA (hsDNA). This fluorescence-sensing system was based on a fluorescence "OFF-ON" mode. First, MB/MG adsorbed on the surface of (mono-6-thio-β-CD)-CdTe QDs effectively quenches the fluorescence of (mono-6-thio-β-CD)-CdTe QDs through PET. Then, addition of hsDNA restores the fluorescence intensity of (mono-6-thio-β-CD)-CdTe QDs, because hsDNA can bind with MB/MG and remove it from the as-prepared (mono-6-thio-β-CD)-CdTe QDs. In addition, detailed reaction mechanisms of the (mono-6-thio-β-CD)-CdTe QDs-MB/MG-hsDNA solution system were studied using optical methods, by comparison with the TGA-CdTe QDs-MB/MG-hsDNA solution system.