Nanostructured CdTe is proving a popular material for a variety of modern applications. Here, we report photoluminescent deterioration of CdTe due to Cl2 contamination. Cl2 gas was bubbled through a 2ml suspension of thioglycolic acid capped CdTe nanoparticles whilst photoluminescence was monitored. With the addition of only 0.02ml of Cl2 a loss of luminescence intensity was observed. Addition of 0.4ml of Cl2 resulted in a 70% loss of luminescence intensity, a 21nm shift in wavelength, and a large narrowing of the full-width-at-half-maximum. Cl2 attacks the Cd-S bond in the thiol capping layer of the nanoparticle, disrupting the passivation of the nanocrystal, and allowing the formation of non-radiative trap states. Smaller nanocrystals with a larger surface area to volume ratio are more heavily affected as is shown in the selective reduction of intensity from the smaller particles resulting in a narrower full-width-at-half-maximum and an apparent photoluminescence shift. A decrease in overall intensity is seen due to the lower number of emitting particles.