Lithium-ion battery (LIB) is a dominating power source in the market owing to its high energy density, good cycling stability and environmental benignity. However, technical challenges remain after years' optimization and commercialization, which are detrimental to the expected performance and lifespan of LIBs. For instance, many cathode materials of LIBs suffer from rapid capacity fading and poor high-rate performance, which are ascribed to self-aggregation, dissolution and fast increased charge transfer resistances during cycles. In terms of the anode materials, low coulombic efficiency, electrolyte depletion and safety issues are common. In addition, the liquid electrolyte systems trigger safety concerns because flammable and volatile organic solvents are necessary. Recently, carbon dots (CDs) emerge as a sound material to address those challenges of LIBs, and also present promising applications in bioimaging, fluorescence sensing, photo/electro-catalysis, and electroluminescence. This review will overlook the state-of-the-art advances in the employment of CDs based composites to build cathode/anode materials and electrolytes in LIBs, through tailoring the internal structures and the surface states of electrode materials, and being additives in electrolyte, to improve the performances of the next-generation LIBs. The major challenges and opportunities in front of CDs in LIBs will be outlined and discussed in detail.