Due to their low toxicity, excellent biocompatibility and attractive optical properties, graphene quantum dots (GQDs) have attracted significant attention in the analytical and biological fields. The controllable intrinsic nature of graphene nano-sheets, e.g., size, layer, edge state or shape, offer the chance to fabricate GQDs with tunable photoluminescence behaviors. Carboxylic moieties on the surface and edges of GQDs can provide efficient reactive sites for interaction with various polymeric, organic, inorganic and biological species. This not only provides the chance to tune the optical properties of GQDs via facile chemical approaches such as surface modulation and doping, but also makes GQDs eco-friendly alternatives to replace the traditional fluorescent probes in biological assays. This review highlights new insights into the various strategies for tuning the optical features of GQDs, and their employment as attractive and powerful probes for bio-sensing/imaging. The challenges and future perspectives in the related fields are discussed.