Monolayer protected clusters (MPCs) are small, metal nanoparticles capped with thiolate ligands that have been widely studied for their size-dependent properties and for their ability to be functionalized for biological applications. Common water-soluble MPCs, functionalized by N-(2-Mercaptopropionyl)-glycine (tiopronin) or glutathione, have been used previously to interface with biological systems. These MPCs are ideal for biological applications not only due to their water-solubility but also their small size (<5 nm). These characteristics are expected to enable easy biodistribution and clearance. In this article, we show an unexpected toxicity is associated with the tiopronin monolayer protected cluster (TMPC), making it incompatible for potential in vivo applications. This toxicity is linked to significant histological damage to the renal tubules, causing mortality at concentrations above 20 μM. We further show how the incorporation of poly ethylene glycol (PEG) by a simple place-exchange reaction eliminates this toxicity. We analyzed gold content within blood and urine and found an increased lifetime of the particle within the bloodstream due to the creation of the mixed monolayer. Also shown was the elimination of kidney damage with the use of the mixed-monolayer particle via Multistix analysis, MALDI-TOF MS analysis, and histological examination. Final immunological analysis showed no effect on white blood cell (WBC) count for the unmodified particle and a surprising increase in WBC count with the injection of mixed monolayer particles at concentrations higher than 30 μM, suggesting that there may be an immune response to these mixed monolayer nanoparticles at high concentrations; therefore, special attention should be focused on selecting the best capping ligands for use in vivo. These findings make the mixed monolayer an excellent candidate for further biological applications using water-soluble nanoparticles.