This review outlines the methods for preparing carbon dots (CDs) from various natural resources to select the process to produce CDs with the best biological application efficacy. The oxidative activity of CDs mainly involves photo-induced cell damage and the destruction of biofilm matrices through the production of reactive oxygen species (ROS), thereby causing cell auto-apoptosis. Recent research has found that CDs derived from organic carbon sources can treat cancer cells as effectively as conventional drugs without causing damage to normal cells. CDs obtained by heating a natural carbon source inherit properties similar to the carbon source from which they are derived. Importantly, these characteristics can be exploited to perform non-invasive targeted therapy on human cancers, avoiding the harm caused to the human body by conventional treatments. CDs are attractive for large-scale clinical applications. Water, herbs, plants, and probiotics are ideal carbon-containing sources that can be used to synthesize therapeutic and diagnostic CDs that have become the focus of attention due to their excellent light stability, fluorescence, good biocompatibility, and low toxicity. They can be applied as biosensors, bioimaging, diagnosis, and treatment applications. These advantages make CDs attractive for large-scale clinical application, providing new technologies and methods for disease occurrence, diagnosis, and treatment research.