The fluorescence of thiol-capped CdTe nanoparticles have been measured using nanosecond laser spectroscopy. While the bandedge fluorescence intensity of CdTe nanoparticles has been found to increase linearly with excitation intensity at low intensities, an unusual decrease of fluorescence intensity with increasing excitation intensity has been observed at higher intensities. This unusual excitation intensity dependence has been tentatively explained by nonlinear exciton-exciton annihilation or Auger photoionization effect that takes place within the 7 ns excitation laser pulse. In contrast, the fluorescence intensity of CdS nanoparticles increases monotonically with excitation intensity in the same intensity range studied. The results indicate that CdTe nanoparticles show stronger nonlinear optical properties due possibly to stronger quantum confinement effect and could be potentially useful for nonlinear optical applications. (C) 2003 American Institute of Physics.