Carbon dots (CDs) is a kind of carbon nanoparticles with a plentiful of surface functional groups and tunable emission with different excitation wavelength. Broadly speaking, CDs include carbon nanodots, carbon quantum dots, graphene quantum dots, carbonized polymer dots. Due to the unique nature, they are explored for various applications in the bio-related fields such as bioimaging, sensor for ion and (bio)molecules, catalyst, LED and other fields. They are viewed as great alternative tracers to the current fluorescent biomarkers in personalized nanomedicine and surgery operation monitoring. In this review, we summarized the recent progress in the development of CDs, including improvement in fluorescence properties, two-photon fluorescence, and integration with other modalities as theragnostic agents. Specifically, we discussed the preparation of dual-modal imaging agents to improve the accuracy of diagnosis, the combination of imaging and targeting functionality for the effective accumulation of biomarkers, and the integration of imaging and therapeutic agents to effectively monitor the localization and concentration of therapeutic agents. Finally, the theragnostic agents composed of three functionalities (e.g. targeting, imaging, and therapy) were summarized to provide readers with future perspectives in this field.