The photoluminescence from water-soluble gold nanoparticles, each composed of a 5.1 nm gold core and a bovine serum albumin (BSA)-protected layer, has been observed. The maximal excitation and the maximal emission wavelength are at 320 and 404 nm, respectively. The photoluminescence quantum yield is estimated as 0.053+/-0.0070, at room temperature. The mechanism of the luminescence is hypothesized to be associated with interband transitions between the filled 5d(10) band and 6(sp)(1) conduction band. The photoluminescence is sensitive to pH, organic solvents and metal ions. These observations suggest that this nanoparticles are a viable alternative to organic fluorophores or semiconductor nanoparticles for biological labeling and imaging.