Carbon dots (CDs), a novel class of carbon-based nanoparticles, have received a lot of interest recently due to their exceptional mechanical, chemical, and fluorescent properties, as well as their excellent photostability and biocompatibility. CDs' emission properties have already found a variety of potential applications, in which bioimaging and sensing are major highlights. It is widely acknowledged that CDs' fluorescence and surface conditions are closely linked. However, due to the structural complexity of CDs, the specific underlying process of their fluorescence is uncertain and yet to be explained. Because of their low toxicity, robust and wide optical absorption, high chemical stability, rapid transfer characteristics, and ease of modification, CDs have been recognized as promising carbon nanomaterials for a variety of sensing applications. Thus, following such outstanding properties of CDs, they have been mixed and imprinted onto different polymeric components to achieve a highly efficient nanocomposite with improved functional groups and properties. Here, in this review, various approaches and techniques for the preparation of polymer/CDs nanocomposites have been elaborated along with the individual characteristics of CDs. CDs/ polymer nanocomposites recently have been highly demanded for sensor applications. The insights from this review are detailed sensor applications of polymer/CDs nanocomposites especially for detection of different chemical and biological analytes such as metal ions, small organic molecules, and several contaminants.