Mesenchymal stem cells (MSCs) have long been regarded as a potential treatment in regenerative medicine. However, due to the lack of effective methods to track and regulate the behavior of implanted MSCs, their application has been greatly limited. Carbon dots (CDs), as a new type of zero-dimensional carbon-based nanomaterial, have attracted extensive attention as nanoprobes, carriers and agents. The focus of this review is to clarify the noninvasive tracing of MSCs by CD-based nanoprobes, including conventional and dual modality imaging, and introduce several means to adjust the labeling performance. The effects of CDs on the differentiation behavior of MSCs and their underlying mechanism are summarized. As an excellent delivery carrier, CDs can easily carry genes and direct MSCs to differentiate. Other biological effects of CDs as agents, such as anti-inflammatory, antibacterial, photodynamic and photothermal effects, are also introduced. Finally, the significant therapeutic effect of the combination of CDs and MSCs, the existing problems of CDs and the future development direction are proposed. This review aims to inform researchers in materials science, biology and medicine to fully exploit the potential of CDs and purposefully modified MSCs, so as to provide some ideas for the application of engineered cell therapy in clinical transformation.