Recently, newly developed carbon-based nanomaterials known as carbon dots (CDs) have generated significant interest in nanomedicine. However, current knowledge regarding CD research in the biomedical field is still lacking. An overview of the most recent development of CDs in biomedical research is given in this review article. Several crucial CD applications, such as biosensing, bioimaging, cancer therapy, and antibacterial applications, are highlighted. Finally, CD-based biomedicine's challenges and future potential are also highlighted to enrich biomedical researchers' knowledge about the potential of CDs and the need for overcoming various technical obstacles.