Synthesis of colloidal functional graphene is challenging because graphene is water-insoluble and its relatively inert surface made the functionalization a difficult task. Here we report interdigited bilayer type coating that provide both colloidal stability and functionalization option for graphene. Colloidal graphene oxide is first converted into interdigited bilayer coated graphene oxide and next they are transformed into colloidal graphene by hydrazine reduction. These coated graphenes can be further transformed into colloidal functional graphene using covalent conjugation chemistry. Functional graphene has been synthesized for optical detection of enzyme where a fluorescent dye is covalently linked through a peptide so that the dye fluorescence is quenched by graphene but switches on once enzymes cleave the peptide bond. The interdigited bilayer coating reported here is unique as it provides coating thickness <3 nm, offering optically responsive graphene-fluorophore substrate with high colloidal stability. © 2011 American Chemical Society.