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Carbon dots (C-dots) are luminescent carbon nanomaterial having good biocompatibility and low toxicity. The characteristic fluorescence emission property of C-dots establishes their role in optical imaging. C-dots which are superior to fluorescent dyes and semiconductor quantum dots act as a safer in vivo imaging probe. Apart from their bioimaging application, other applications in biomedicine such as drug delivery, cancer therapy, and gene delivery were studied. In this review, we present multifaceted applications of C-dots along with their synthesis, surface passivation, doping, and toxicity profile.