Carbon quantum dots (CQDs), a new family of photoluminescent 0D NPs, have recently received a lot of attention. They have enormous future potential due to their unique properties, which include low toxicity, high conductivity, and biocompatibility and accordingly can be used as a feasible replacement for conventional materials deployed in various optoelectronic, biomedical, and energy applications. The most recent trends and advancements in the synthesizing and setup of photoluminescent CQDs using environmentally friendly methods are thoroughly discussed in this review. The eco-friendly synthetic processes are emphasized, with a focus on biomass-derived precursors. Modification possibilities for creating newer physicochemical properties among different CQDs are also presented, along with a brief conceptual overview. The extensive amount of writings on them found in the literature explains their exceptional competence in a variety of fields, making these nanomaterials promising alternatives for real-world applications. Furthermore, the benefits, drawbacks, and opportunities for CQDs are discussed, with an emphasis on their future prospects in this emerging research field.