US nano-crystallites are prepared through a simple chemical route using mercaptoethanol as an organic capping agent inhibiting the coalescence of nano-particles. The ratio of sulphide (S):mercaptoethanol (SH) is first taken as 1:4 and then varied to 1:3 and 1:2, respectively, to prepare three sets to seek variation in the crystallite size. SEM investigation on the as-prepared samples reveals the nonuniform nature of cluster growth. The influence of annealing on the grain growth at two different temperatures of 100 and 200degreesC for 10 min in vacuum is investigated using SEM and XRD analysis. High-resolution TEM and XRD studies indicate an average crystallite size in the range 2-4 nm. The size of the crystallites is found to be less affected by the S:SH ratio, but annealing is found to be responsible for appreciable grain growth. The role of surface modification with annealing is evident in the PL spectra of the US nano-crystallites. (C) 2002 Elsevier Science B.V. All rights reserved.