Nanoparticles decorated with biocompatible coatings have received considerable attention in recent years for their potential biomedical applications. However, the desirable properties of nanoparticles for in vivo uses, such as colloidal stability, biodistribution, and pharmacokinetics, require further research. In this work, we report a bio-derived zwitterionic surface ligand, cysteine betaine (Cys-b) for the modification of hollow gold-silver nanoshells, giving rise to hyperthermia applications. Cys-b coatings on planar substrates and nanoshells were compared to conventional (11-mercaptoundecyl)tri(ethylene glycol) (OEG-thiol) to investigate their effects on the fouling resistance, colloidal stability, environmental tolerance, and photothermal properties. The results found that Cys-b and OEG-thiol coatings exhibited comparable antifouling properties against bacteria of gram-negative Pseudomonas aeruginosa (P. aeruginosa) and gram-positive Staphylococcus epidermidis (S. epidermidis), NIH-3T3 fibroblasts, and bovine serum albumin. However, when the modified nanoshells were suspended at a temperature of 50 °C in aqueous 3 M NaCl solutions, shifts in the extinction maximum of the OEG-capped nanoshells with time were observed, while the corresponding spectra of nanoshells capped with Cys-b generally remained unchanged. In addition, when the nanoshells were continuously exposed to NIR irradiation, the temperature of the solution containing nanoshells capped with Cys-b increased to a plateau of 54 °C, while that of the OEG-capped nanoshells gradually decreased after reaching a peak temperature. Accordingly, the Cys-b nanoshells were conjugated with anti-HER2 antibodies for targeted delivery to HER2-positive MDA-MB-453 breast cancer cells for hyperthermia treatment. The results showed the selective delivery and effective photothermal cell ablation with the antibody-conjugated Cys-b nanoshells. Therefore, this work demonstrated the promise of bio-derived zwitterionic Cys-b as a stable and biocompatible surface coating for materials in nanomedicine.