Carbon dots, usually with sizesless than 10 nm, are one of interesting carbon-based nanomaterials. They can be prepared from various precursors such as organic small molecules, polymers, and graphene under different conditions. Most carbon dots possess high quantum yields, unique optical properties (excitation-wavelength dependent emission), biocompatibility, and chemical/ photo stability, which have become important sensing materials. This review summarizes synthesis of carbon dots, their optical properties and origin of their photoluminescence, and their applications in bio-imaging and cancer therapy.