Cadmium sulphide nanoparticles were synthesized by chemical displacement reaction method using cadmium nitrate as cadmium source and ammonium sulphide as sulphur source. The CdS samples are characterized using X-ray diffraction, UV-Vis spectroscopy, FTIR spectroscopy, scanning electron microscopy and impedance spectroscopy. CdS nanoparticles are found to possess cubic structure with the crystallite size similar to 10 nm. The absorption spectra of synthesized CdS nanoparticles revealed the blue shift in excitonic transitions with respect to CdS bulk material, clearly confirming the formation of nanoparticles. The dielectric properties of CdS nanoparticles are studied in the frequency range 10(3)-10(7) Hz at room temperature. The dielectric properties of CdS nanoparticles are found to be significantly enhanced specially in the low frequency range due to confinement.