Since the beginning of nanoscience and nanotechnology, carbon dots (CDs) have been the foundational idea and have dominated the growth of the nano‐field. CDs are an intriguing platform for utilization in biology, technology, catalysis, and other fields thanks to their numerous distinctive structural, physicochemical, and photochemical characteristics. Since several carbon dots have already been created, they have been assessed based on their synthesis process, and luminescence characteristics. Due to their biocompatibility, less toxic effects, and most significantly their fluorescent features in contrast to other carbon nanostructures, CDs have several benefits. This review focuses on the most recent advancements in the characterization, applications, and synthesis techniques used for CDs made from natural sources. It will also direct scientists in the creation of a synthesis technique for adjustable carbon dots that is more practical, effective, and environmentally benign. With low toxicity and low cost, CDs are meeting the new era's requirements for more selectivity and sensitivity in the detection and sensing of various things, such as biomaterial sensing, enzymes, chemical contamination, and temperature sensing. Its variety of properties, such as optical properties, chemiluminescence, and morphological analysis, make it a good option to use in bioimaging, drug delivery, biosensors, and cancer diagnosis.