Carbon dots (C dots) with biocompatibility, brightness, stability against photoirradiation and salt, and ease in preparation have become important materials for sensing and imaging. They can be prepared from natural materials and small organic molecules through hydrothermal, microwave‐assistant, and electrochemical methods, with advantages of simplicity and low cost. To enhance the quantum yields of C dots in the red and near‐infrared regions, doping of C dots with heteroatoms such as nitrogen and sulfur has been suggested. C dots both with and without being functionalized recognition elements such as antibodies and aptamers are selective and sensitive for sensing of analytes, including metal ions (e.g., Fe3+, Hg2+, Cu2+), small molecules (e.g., H2O2, cysteine, glutathione), and biopolymers like proteins, as well as for in vitro and in vivo imaging. Depending on the size, charge, and surface ligands of C dots used to label cells, fluorescence images of different organelles are shown. Multicolor images of bacteria, mammalian cells, and plant tissues incubated with C dots are realized when excited at different wavelengths. In this review, many excellent sensing and imaging examples of C dots are presented to highlight their features and to show their challenges for analytical applications.