Carbon nanodots (CNDs) are an emerging class of zero‐dimensional carbon nanomaterials that accumulated immense interest from researchers in the past two decades due to their facile synthesis and unique photo‐physical and ‐chemical properties. In particular, their long wavelength fluorescence emission, enhanced tissue penetration depth, excellent water dispersibility, tuneable surface chemistry, charge transfer properties, and biocompatibility have unveiled newer avenues for advanced application in therapeutics, diagnostics, theranostics, and tissue regeneration.The review typically emphasizes CNDs, excluding the other members of the carbon dots (CDs) family, which has not been covered before. After introducing CNDs in the carbon nanomaterial hierarchy, their synthesis, general properties, functionalization, and characterization are subsequently discussed. The following section elaborates on mechanisms of CNDs fluorescence, quenching, and associated factors based on the latest theories and models. The diagnostic, theranostic, and therapeutic applications of red/NIR‐emitting CNDs are thoroughly reviewed to cover the latest developments, including in vitro/in vivo bioimaging, thermoelectric and piezoelectric biosensing, and various soft and hard tissue regeneration. Overall, this work will enlighten passionate readers about the present status and futuristic aspects of CNDs in healthcare management, besides reported toxicities and challenges associated with their bench‐to‐bedside translation.This article is protected by copyright. All rights reserved