This work involves the development of a novel waste-derived carbon dots (CDs) conjugated with silver (Ag) nanohybrid system-based Fluorescence Resonance Energy Transfer (FRET) sensor for the detection of melamine. CDs and Ag nanoparticles served as energy donors and energy acceptors, respectively. CDs were synthesized from orange peel waste through a combined hydrothermal and ultra-sonication route. The synthesized CDs had hydroxyl, amino, and carboxyl groups on their surface, explaining that waste-derived CDs can act as reducing and stabilizing agents and showed strong absorption and fluorescence emission at 305 and 460 nm, respectively. The bandgap, linear refractive index, conduction band, and valance band potential of CDs were observed to be 2.86, 1.849, 1.14, and 4.002 eV, respectively. No significant difference was observed in the fluorescence properties at different pH (acid and alkaline) and ionic concentrations. Given their fluorescent nature, the synthesized CDs were used for the detection of melamine. The fluorescence of CDs was found to be quenched by Ag+ due to the FRET energy transfer between CDs to Ag. Notably, the zeta potential of Ag@CDs was changed from − 28.7 mV to − 30.6 mV after the incorporation of Ag+. Ag@CDs showed excellent selectivity and sensitivity toward the sensing of melamine in the aqueous solutions with the limit of detection ~ 0.85 μM. Increasing the melamine level also raises the FL intensity of Ag@CDs. The substrate was effectively used in the detection of melamine in milk as a real application and the recovery percentage was found to be 98.03%. Moreover, other adulterants such as urea and formaldehyde can be detected selectively by Ag@CDs. Overall, the synthesized Ag@CDs can be used as an efficient material for sensing applications involving such food adulterants.