Recent advances in nanomaterial design and synthesis has resulted in robust sensing systems that display superior analytical performance. The use of nanomaterials within sensors has accelerated new routes and opportunities for the detection of analytes or target molecules. Among others, carbon-based sensors have reported biocompatibility, better sensitivity, better selectivity and lower limits of detection to reveal a wide range of organic and inorganic molecules. Carbon nanomaterials are among the most extensively studied materials because of their unique properties spanning from the high specific surface area, high carrier mobility, high electrical conductivity, flexibility, and optical transparency fostering their use in sensing applications. In this paper, a comprehensive review has been made to cover recent developments in the field of carbon-based nanomaterials for sensing applications. The review describes nanomaterials like fullerenes, carbon onions, carbon quantum dots, nanodiamonds, carbon nanotubes, and graphene. Synthesis of these nanostructures has been discussed along with their functionalization methods. The recent application of all these nanomaterials in sensing applications has been highlighted for the principal applicative field and the future prospects and possibilities have been outlined.