Fluorescence correlation spectroscopy is rapidly becoming important to study multidisciplinary applications of diffusing quantum dots. However, ordinary understanding of correlation measurements is inadequate because of the natural tendency of nanocrystals to show optical saturation. The present Letter describes a novel, but easily applied approach which accounts for optical saturation in the autocorrelation function for diffusion. This simple analytical model is of general validity and is used to explain non-linear behaviors observed for quantum dots in dilute solutions. (c) 2008 Elsevier B. V. All rights reserved.