The past few decades have witnessed significant advances in the development of functionalized metal/metal oxide nanoparticles including those of inorganic noble metals and magnetic materials stabilized by various polymeric ligands. Recent applications of such functionalized nanoparticles, including those in bio-imaging, sensing, catalysis, drug delivery, and other biomedical applications have triggered the need for their facile and reproducible preparation with a better control over their size, shape, and surface chemistry. In this perspective, the multidentate polymer ligands containing functional groups like thiol, thioether, and ester are important surface ligands for designing and synthesizing stable nanoparticles (NPs) of metals or their oxides with reproducibility and high yield. These ligands have offered an unprecedented control over the particle size of both nanoparticles and nanoclusters with enhanced colloidal stability, having tunable solubility in aqueous and organic media, and tunable optical, magnetic, and fluorescent properties. This review summarizes the synthetic methodologies and stability of nanoparticles and fluorescent nanoclusters of metals (Au, Ag, Cu, Pt, and other transition metal oxides) prepared by using thioether based ligands and highlights their applications in bio-imaging, sensing, drug delivery, magnetic resonance imaging (MRI), and catalysis. The future applications of fluorescent metal NPs like thermal gradient optical imaging, single molecule optoelectronics, sensors, and optical components of the detector are also envisaged.