Room temperature phosphorescent carbon dots (RTP CDs) have received increasing attention in recent years due to their outstanding optical properties and potential applications. It is worth noting that RTP CDs in aqueous solution have inspired special interests because of their low toxicity, long lifetime, and ability to avoid autofluorescence and background fluorescence, exhibiting wide application prospects in time‐resolved biological imaging and sensing. However, achieving phosphorescent CDs in aqueous solutions remains a considerable challenge because water molecules and oxygen can cause the deactivation of triplet‐state excitons, resulting in phosphorescence quenching. Several strategies have been proposed to counter the problem including encapsulated CDs in a rigid matrix, hydrogen bonding, and covalent bonding fixation. Consequently, a more significant number of RTP CDs materials with excellent optical stability, long lifetime, and multicolor are successfully obtained. Herein, the recent development of RTP CDs materials in aqueous solution as well as the corresponding fabricated strategies and luminescence mechanism is detailly summarized and reviewed. Furthermore, various applications of water‐phase RTP CDs materials in information security, sensing, bioimaging, light‐emitting diodes, and fingerprinting are also discussed. Finally, an outlook on the development of CDs materials and applications is proposed.