Luminescent carbon-based nanomaterials have inspired tremendous research interests due to their tunable optical properties as well as superior biocompatibility. In this review, distinct light emission properties of carbon dots (CDs) derived from different synthesis methods are summarized. The optical properties of as-synthesized CDs can be further controlled by element doping and surface functionalization of CDs for tunable band gap. Due to their low cytotoxicity and tunable optical behaviors, luminescent CDs have been extensively studied for their potential biomedical applications, such as analytical sensors, and bioimaging devices. This review presents a comprehensive overview of the emerging luminescent CDs and their applications as biosensors and bioimaging agents. The challenges and perspectives in the near future are also discussed.