In recent decades, photoluminescence (PL) material with excellent optical properties has been a hot topic. Graphene oxide (GO) is an excellent candidate for PL material because of its unique optical properties, compared to pure graphene. The existence of an internal band gap in GO can enrich its optical properties significantly. Therefore, GO has been widely applied in many fields such as material science, biomedicine, anti-counterfeiting, and so on. Over the past decade, GO and quantum dots (GOQDs) have attracted the attention of many researchers as luminescence materials, but their luminescence mechanism is still ambiguous, although some theoretical results have been achieved. In addition, GO and GOQDs have fluorescence quenching properties, which can be used in medical imaging and biosensors. In this review, we outline the recent work on the photoluminescence phenomena and quenching process of GO and GOQDs. First, the PL mechanisms of GO are discussed in depth. Second, the fluorescence quenching mechanism and regulation of GO are introduced. Following that, the applications of PL and fluorescence quenching of GO–including biomedicine, electronic devices, material imaging–are addressed. Finally, future development of PL and fluorescence quenching of GO is proposed, and the challenges exploring the optical properties of GO are summarized.