Synthesize of functionalized gold nanoparticles has attracted a great deal of interest due to their favorable optical properties and broad range of biomedical applications. One challenge for biomedical application is to find a simplemethod in the manufacturing of biocompatible and stablewater soluble gold particles with a well-controlled shape and size. In the current study, a novel methodology based on microemulsion system has been introduced to prepare biocompatible gold nanoparticles protected by a monohydroxy thioalkylated PEG ligand. The morphology and size distribution of gold nanoparticles was determined by different methods including dynamic light scattering (DLS), UV–visible spectrophotometry, Energy-dispersive X-ray analysis (EDX) and transmission electron microscopy (TEM). It is verified that the prepared water-based functionalized gold colloidal system has particles size in the range of 7–9 nm with no cytotoxicity effect to HeLa cells.