If semiconductor quantum dots are to be incorporated into hetero-structural devices such as light emitting diodes it is important to understand the influences of the surrounding medium on the properties and particularly the photoluminescence of the nanocrystals. Here we investigate the temperature dependence of emission from CdTe quantum dots in aqueous solution with capping layers of thioglycolic acid. Results from quantum dots both held in suspension and deposited as thin films are shown. In both suspensions and thin film multilayers a reversible spectral shift to lower energy is seen with increasing temperature. This red shift of photoluminescence is thought to be the result of increased exciton carrier transfer between the quantum dots at higher temperatures and the thermal activation of emission from lower energy trap states. Both suspension and thin film devices also show a recoverable loss in photoluminescence intensity when the sample is heated. These changes are explained by the thermal activation of nonradiative surface traps. Finally, an irreversible loss in photoluminescence is reported in the CdTe thin film devices and to a lesser extent also in the quantum dot suspensions. This observation is explained by the heat induced formation of agglomerates imaged by AFM analysis.