Nitrogen doped Carbon Quantum Dots (NCQDs) is synthesized in most economical and easiest hydrothermal process. Here N-phenyl orthophenyldiamine and citric acid are applied as a source of nitrogen and carbon for the preparation of NCQDs. The synthesized NCQDs were characterized using experimental techniques like UV−Vis absorption, FT-IR, transmission electron microscopy (TEM), X-ray Diffraction (XRD), dynamic light scattering (DLS), fluorimeter and time resolved fluorescence spectroscopy. These nitrogen doped carbon quantum dots are used to study their bactericidal activity against representative Gram-negative (E. coli and P. aeruginosa) and Gram-positive (B. Subtilis and S. Aureus) bacterial strains by the agar well diffusion method. Results shows that synthesized Nitrogen doped carbon quantum dots have maximum antibacterial activity against S. aureus with good inhibitory effect and inhibition range from 2 mg mL-1 to 3 mg mL-1. These Nitrogen doped carbon quantum dots are also used as fluorescence probe for sensitive and selective detection of mercury. The emission intensity of carbon quantum dots has drastically quenched by Hg2+ ion. Observed limit of detection (LOD) is 4.98 nM, much below than the approved limit prescribed by Environmental Protection Agency. Hence the synthesized NCQDs play an important role in monitoring the antibacterial effect as well as water quality. Measured quantum yield of the NCQDs were ~ 53%. TEM image shows that the NCQDs are quasi-spherical shaped with average size of 3.5 nm.