Abstract: Carbon encapsulated CdS nanoparticles with the core-shell structure were successfully prepared by hydrothermal method, and the influences of carbon coating layer on the microstructure and optical properties of CdS@C were investigated by X-ray diffraction, high-resolution transmission electron microscope, and spectroscope. The results show that, the carbon encapsulated CdS nanoparticles have the obvious core-shell structure, the inner core is CdS with the hexagonal wurtzite structure, and the outer shell is carbon layer. The particle morphology is mainly spherical or ellipsoidal shape with the uniform particle size and good dispersion, the particle size distribution is in the range of 20～60 nm, the average particle size is 35 nm, and the thickness of carbon layer is about 5 nm. Photoluminescence spectra show that the luminescence intensity of the carbon encapsulated CdS is weaker than that of the pure CdS, the Raman spectra reveal that the carbon coating layer shows the low graphitization degree in the carbon encapsulated CdS samples, the Fourier transform infrared spectra show that the absorption peaks of the pure CdS and the carbon encapsulated CdS samples are basically similar. The ultraviolet visible spectra indicate that the carbon encapsulated CdS nanocrystals enhance the absorption intensity of the visible light, narrow the energy gap, and result in the red shift.