The accelerating buildup of plastic waste, especially styrene foam, has become a major environmental problem. Traditional methods of recycling do not help in managing Styrofoam waste efficiently because of economic factors and minimal technological advancements available. Pyrolysis is one of the promising ways to transform styrenofoam wastes into value-added compounds with nominal emission of harmful gases. This research aims to explore the synthesis of graphene quantum dots (GQDs) from Styrofoam waste through hydrothermal pyrolysis and convert it into a high-utility, value-added product. The successful formation of GQDs was confirmed through multiple characterization techniques: transmission electron microscopy revealed a uniform size distribution of 6 ± 1 nm; dynamic light scattering confirmed all GQD samples were below 10 nm; Raman spectroscopy identified the presence of a single-layered graphene structure; and X-ray photoelectron spectroscopy demonstrated the incorporation of nitrogen and oxygen functionalities. The quantum yield of GQDs increased with increase in reaction temperature and the edge functionalities, giving a peak value of 1.87 as confirmed using photoluminescence and UV-Vis spectroscopy, indicating their suitability for enhanced optical performance. The synthesized GQDs were explored as sensors for the detection of heavy metal ions in water. The sensor showed versatility and efficacy for copper ions across different pH levels, water sources, and anions present in various copper salts. Ultimately the concentration of unknown copper ion solutions was calculated from GQD-sensor-based RGB studies, matching closely with UV-Vis spectroscopy values of the unknown solutions. This work demonstrates a promising approach for the pyrolysis-based treatment of plastic waste, contributing to waste management and sustainability efforts.