A general-applicable two-phase ligand exchange method is developed to prepare a series of monodisperse water-soluble AuAg nanoclusters. This method relies on the ligand exchange of the water-soluble ligands (e.g., tiopronin, captopril, N-acetyl-l-cysteine, 4-mercaptobenzoic acid, glutathione, and mercaptosuccinic acid) with phenylacetylene and triphenylphosphine co-protected AuAg precursors. Both polyacrylamide gel electrophoresis (PAGE) and transmission electron microscopy (TEM) indicate the monodispersity and ultrasmall size of the prepared water-soluble metal nanoclusters. In addition, the structure has also been characterized by UV?vis absorption spectroscopy, extended X-ray absorption fine structure (EXAFS), electrospray ionization time-of-flight mass spectra (ESI-TOF-MS), etc. The preliminary application of the as-prepared AuAg nanoclusters protected with tiopronin has been explored via the postmodification of the carboxyl groups of thiols with doxorubicin (DOX).