Despite their importance in nano-environmental health and safety, interactions between engineered nanomaterials and microbial life remain poorly characterized. Here, we used the model organism E. coli to study the penetration requirements, subcellular localization, induction of stress responses, and long-term fate of luminescent Mn-doped ZnS nanocrystals fabricated under "green" processing conditions with a minimized ZnS-binding protein. We find that such protein-coated quantum dots (QDs) are unable to penetrate the envelope of unmodified E. coli but readily translocate to the cytoplasm of cells that have been made competent by chemical treatment. The process is dose-dependent and reminiscent of bacterial transformation. Cells that have internalized up to 0.5 μg/mL of nanocrystals do not experience a significant activation of the unfolded protein or SOS responses but undergo oxidative stress when exposed to high QD doses (2.5 μg/mL). Finally, although they are stable in quiescent cells over temperatures ranging from 4 to 42°C, internalized QDs are rapidly diluted by cell division in a process that does not involve TolC-dependent efflux. Taken together, our results suggest that biomimetic QDs based on low toxicity inorganic cores capped by a protein shell are unlikely to cause significant damage to the microbial ecosystem.