The dispersion stability of nano‐lubricating additives is crucial for the shelf life of lubricant and its practical applications. Nitrogen–sulfur co‐doped carbon dots (N,S@CDs) via a one‐step hydrothermal method with nitropyrene and thiourea as raw materials are hereby presented. The N and S elements are selectively distributed throughout the entire carbon skeleton with a doping amount of 22.6 at%. The as‐synthesized N,S@CDs exhibit excellent dispersion stability in PEG200 and maintain stability for over one year. The experiment results indicate that N,S@CDs significantly improve the anti‐wear and friction reduction properties of PEG200, while the friction coefficient is reduced from 0.25 to 0.09 with 1.5 wt% N,S@CDs addition, and the wear volume, depth, and width are reduced by 68%, 52%, and 57%, respectively. The good lubrication performance is attributed to N,S@CDs excellent dispersion stability, enhanced filling and polishing effects, and complex tribochemical reactions caused by heteroatom doping to form a stable protective film on the worn surface. Furthermore, the as‐prepared N,S@CDs exhibit intrinsic fluorescence intensity in PEG200 with the photoluminescence quantum yield (PLQY) of 12.5% and remain fluorescent stable during the long‐term friction process, therefore the N,S@CDs have a potential application prospect in non‐destructive detection of oil leakage via fluorescence labeling method.