Semiconducting polymers with low-density side-chain carboxylic acid groups were synthesized to form stable, functionalized, and highly fluorescent polymer dots (Pdots). The influence of the molar fraction of hydrophilic side-chains on Pdot properties and performance was systematically investigated. Our results show that the density of side-chain carboxylic acid groups significantly affects Pdot stability, internal structure, fluorescence brightness, and nonspecific binding in cellular labeling. Fluorescence spectroscopy, single-particle imaging, and a dye-doping method were employed to investigate the fluorescence brightness and the internal structure of the Pdots. The results of these experiments indicate that semiconducting polymers with low density of side-chain functional groups can form stable, compact, and highly bright Pdots as compared to those with high density of hydrophilic side-chains. The functionalized polymer dots were conjugated to streptavidin (SA) by carbodiimide-catalyzed coupling and the Pdot-SA probes effectively and specifically labeled the cancer cell-surface marker Her2 in human breast cancer cells. The carboxylate-functionalized polymer could also be covalently modified with small functional molecules to generate Pdot probes for click chemistry-based bio-orthogonal labeling. This study presents a promising approach for further developing functional Pdot probes for biological applications.