Antimicrobial and anticancer drugs are widely used due to increasing widespread infectious diseases caused by microorganisms such as bacterial, fungal, viral agents, or cancer cells, which are one of the major causes of mortality globally. Nevertheless, several microorganisms developed resistance to antibiotics as a result of genetic changes that have occurred over an extended period. Carbon-based materials, particularly carbon dots (C-dots), are potential candidates for antibacterial and anticancer nanomaterials due to their low toxicity, ease of synthesis and functionalization, high dispersibility in aqueous conditions, and promising biocompatibility. In this Review, the content is divided into four sections. The first section concentrates on C-dot structures, surface functionalization, and morphology. Following that, we summarize C-dot classifications and preparation methods such as arc discharge, laser ablation, electrochemical oxidation, and so on. The antimicrobial applications of C-dots as antibacterial, antifungal, and antiviral agents both in vivo and in vitro are discussed. Finally, we thoroughly examined the anticancer activity displayed by C-dots.