Two-dimensional transition metal dichalcogenides (TMDs), such as MoS2, generally exist in two different polymorphic structures, metallic (1T phase) and semiconducting (2H phase). In context of their wide spectrum of applications ranging from electronic to biomedicine, the aspects of ligand conjugation and solution processability are highly significant. In addition, the assessment of their antibacterial property and biocompatibility is equally important to explore their biomedical applications. Here we report a new method for the exfoliation and direct functionalization of 2H-MoS2 using surfactant molecules with thiol functionality. We found that the exfoliated MoS2 using thiolated ligands are functionalized with desired functionality and the processing scheme can be extended to other TMDs. Functionalized 2H-MoS2 exhibits highly enhanced antibacterial efficiency compared to similarly functionalized metallic 1T-MoS2 against pathogenic bacteria. The newly synthesized functionalized 2H-MoS2 exhibits better hemocompatibility, which makes it suitable for in vivo applications. This convenient functionalization method opens the door for many other applications of functionalized semiconducting 2H-MoS2 and other TMDs.