As one of the most promising nanomaterials for biomedical applications, carbon dots (CDs) hold great potential in the field of bioimaging, biosensing and biotherapy due to their low cytotoxicity, high water solubility, favorable biocompatibility, good photostability, tunable fluorescence emission and excitation. In this review, we will provide an update on the latest research of CDs on the synthetic routes, chemical modifications, optical properties and biomedical applications. We will mainly discuss their applications in bioimaging of normal and cancer stem cells and tumour cells, two-photon fluorescence imaging, in vivo imaging, biosensing, and cancer therapy including photothermal therapy, photodynamic therapy and chemotherapy. At the end, current challenges and future perspectives of CDs in biomedical applications will also be discussed. We hope that this review will provide valuable insights to inspire new discoveries on CDs and draw a roadmap towards a broader range of biomedical applications.