Carbon quantum dots (CQDs) are novel nanostructures that have great potential as fluorescent markers due to their multi-fluorescence, down and up converted emission, resistance to photobleaching, and biocompatibility. Here, we report the synthesis of fluorescent CQDs by the submerged arc discharge in water method. We discuss the method's simplicity, natural phases’ separation, and scalability. The produced CQDs size distribution was in the range of 1–5 nm. High-resolution transmission electron microscopy images and their fast Fourier transformation allowed the analysis of the CQDs’ internal structure. The absorption and fluorescence spectra of the as-produced CQDs were analyzed. The UV-Vis spectrum shows a single band with a maximum located at 356 nm. The photoluminescence emission presents two consistent bands with maxima located in the ranges of 320–340 nm (band A) and 400–410 nm (band B). To these emission bands correspond two bands in the excitation spectra located at 275 nm (band A) and 285 nm (band B). The fluorescence quantum yield was assessed as ∼16% using Rhodamine 6G as reference. The capabilities of the produced CQDs as fluorescent markers for in vitro studies were also evaluated by setting them in contact with a cell culture of L929 murine fibroblasts. Control and CQD-treated cell cultures were visualized under a fluorescence microscope. Finally, the mechanism of formation of these nanostructures by top-down methods is discussed, and a general model of formation is proposed.