The remarkable potential of engineered nanomaterials has been seen in various biomedical applications because of their unique size-dependent properties. The high Z number for gold (Z=79) makes them an ideal candidate to enhance the therapeutic efficacy of the radiation therapy. Here we present the synthesis and characterization of fluorescent PEGylated gold nanoparticles of sub-10nm size as efficient radiosensitizing agents which can be tracked using inherent photoluminescence from the conjugated fluorophore. We have synthesized ultrasmall gold nanoparticles (UGNPs) with a core diameter of 2-4nm. These nanoparticles were further conjugated with different ratios of methoxy and amine PEG for imparting long circulation properties and functional groups on the nanoparticle surface. The amine groups on the nanoparticles surface were further conjugated to the fluorescent molecule, Alexa fluor 647 (AF647). The UGNP were characterized using DLS, TEM and photoluminescence studies. The cellular uptake was studied in PC3 cells by fluorescence confocal microscopy. For biocompatibility studies, cell survival assay (MTS assay) carried out with UGNPs showed no toxicity over a range of 0-2.5mg/ml of nanoparticle concentrations. The cells treated with UGNPs were irradiated with kilovoltage X-rays. Clonogenic assay was used for quantitation of the DNA damage with and without nanoparticles as controls. The results indicated increased DNA damage in cells treated with gold nanoparticles. The results obtained from these studies will lay a foundation for the in vivo application of these nanoparticles in enhancing the radiation therapy. Work supported by NSF-DGE-0965843 and HHS/1U54CA151881 CORE1.