The modification of individual oxygen functional groups and the resultant optical properties of a graphene oxide suspension were investigated using a controlled photothermal reduction by infrared irradiation. The evolution of the structural and optical characteristics of GO suspensions was obtained from Raman spectra, x-ray photoelectron spectroscopy, optical absorption, and steady state and time-resolved photoluminescence spectroscopy. The results suggest the gradual restoration of sp(2) clusters within the sp(3) matrix with an increase of the reduction time and power density. The yellow-red emission (∼610 nm) originated from the defect-assisted localized states in GO due to epoxy/hydroxyl (C-O/-OH) functional groups and that of the blue emission (∼500 nm) was ascribed to the carbonyl (C=O)-assisted localized electronic states. With an increase in the reduction time and IR power density, the intensity of the yellow-red emission was found to decrease, with the blue emission being prominent. These experimental findings open up a new dimension for controlling the optical absorption and emission properties of graphene oxide by tailoring the oxygen functional groups, which may lead to the potential application of graphene-based optoelectronic devices.