Carbon Quantum Dots (CQDs), a new class of 0D carbon-based nanomaterials, have garnered significant interest due to their exceptional physicochemical properties, including high photoluminescence, excellent biocompatibility, chemical stability, and low cytotoxicity. This review provides a comprehensive overview of recent advances in CQD synthesis strategies, ranging from top-down approaches such as arc discharge, electrochemical oxidation, and laser ablation to bottom-up techniques like hydrothermal, solvothermal, microwave-assisted, and thermal decomposition methods. Special emphasis is placed on green synthesis routes employing natural precursors, aligning with sustainable nanotechnology goals. The influence of heteroatom doping and surface functionalization on the electronic and optical properties of CQDs is systematically discussed. Furthermore, we elucidate the role of CQDs as efficient components in photocatalysis, photovoltaics, sensing, and drug delivery, highlighting their integration into perovskite and organic solar cells, as well as their applicability in advanced biosensors and targeted drug delivery systems. The review also explores various characterization techniques such as UV–Vis, PL, TEM, FTIR, XRD, and Raman spectroscopy, critical for understanding CQD structure property relationships. Overall, this work distills current insights and future prospects of CQDs, underscoring their transformative potential across environmental, energy, and biomedical domains.