Graphene quantum dots (GQDs) are known to display tunable photoluminescence (PL) proprieties by functional modification. Here, yellow fluorescence amino-functionalized GQDs (af-GQDs) were synthesized using high-softening point asphalt as precursor and ammonia as nitrogen source, and the mechanism of fluorescence enhancement by nitrogen-containing functional groups is also discussed in detail. The photoluminescence quantum yield (QY) of the resultant GQDs increased from 4.7% to 13.8% after the amino-hydrothermal treatment. Transmission electron microscopy (TEM) images showed that the af-GQDs have more uniform size distribution than GQDs. PL and ultraviolet-visible spectrum (UV-Vis) suggested that two types of electron transitions namely pi-pi(*) and n-pi(*) occurred intrinsically in GQDs, and n-pi(*) transition of functional groups was more prominent in af-GQDs. Fourier transform infrared spectroscopy (FT-IR) and X-ray photoelectron spectroscopy (XPS) analyses demonstrated that reduction reactions occurred on the surface of GQDs, and nitrogen functional groups were introduced into GQDs during the amino-hydrothermal treatment process. Ultraviolet photoelectron spectroscopy (UPS) results confirmed that the energy level of the highest occupied molecular orbit increased from 6.98 to 7.26 eV. The amide and amino groups were considered to contribute to the fluorescence enhancement of GQDs. Furthermore, the af-GQDs were used as effective fluorescent sensing probes to detect Fe3+ ions, which have a high sensitivity, good selectivity, and superior detection limit of 0.51 nM, indicating their promising application in trace Fe3+ ion detection.