Quantum dots, which won the Nobel Prize in Chemistry, have recently gained significant attention in precision medicine due to their unique properties, such as size-tunable emission, high photostability, efficient light absorption, and vibrant luminescence. Consequently, there is a growing demand to identify new types of quantum dots from various sources and explore their potential applications as stimuli-responsive biosensors, biomolecular imaging probes, and targeted drug delivery agents. Biomass-waste-derived carbon quantum dots (CQDs) are an attractive alternative to conventional QDs, which often require expensive and toxic precursors, as they offer several merits in eco-friendly synthesis, preparation from renewable sources, and cost-effective production. In this study, we evaluated three CQDs derived from biomass waste for their potential application as non-toxic bioimaging agents in various cell lines, including human dermal fibroblasts, HeLa, cardiomyocytes, induced pluripotent stem cells, and an in-vivo medaka fish (Oryzias latipes) model. Confocal microscopic studies revealed that CQDs could assist in visualizing inflammatory processes in the cells, as they were taken up more by cells treated with tumor necrosis factor-α than untreated cells. In addition, our quantitative real-time PCR gene expression analysis has revealed that citric acid-based CQDs can potentially reduce inflammatory markers such as Interleukin-6. Our studies suggest that CQDs have potential as theragnostic agents, which can simultaneously identify and modulate inflammatory markers and may lead to targeted therapy for immune system-associated diseases.