Carbon dots (C-dots) are a developing subclass of nanomaterials which are characterized by a typical diameter of less than 10 nm. C-dots are a type of core–shell composites that feature a surface passivation with various functional groups, including amine, carboxyl, hydroxyl group, and a carbon core. Green C-dots, which have drawn a lot of interest from researchers due to their superior water solubility, excellent biocompatibility, and environmental-friendly behavior when compared to chemically generated C-dots, can be made from a variety of low-cost and renewable materials. Since green C-dots have heteroatoms on their surface in the form of carboxyl, amine, hydroxyl, or other functional groups, which can enhance their physicochemical characteristics, quantum yield (QY), and likelihood of visible light absorption, further surface passivation is not necessary. Green C-dots may find use in the areas of biosensing, catalysis, bioimaging, and gene and drug delivery. In this paper, the creation of C-dots was outlined, and its fluorescence process examined. This review represents the summary of synthesis, mechanism, properties, characterization, and applications of C-dots. This article aims at the green chemistry strategies for C-dot synthesis. Furthermore, a discussion on the applications of C-dots produced with green approaches is presented. The paper may help the researchers in the field to develop new C-dots with potential features to attract the attention of new applications.