Carbon dots (CDs), a novel family of multifunctional carbon-nanomaterials, has the potential to revolutionize several important fields supporting the transformation to sustainable bioeconomy. CDs are characterized by attractive properties such as tunable optoelectronic and fluorescence properties, low toxicity, good biocompatibility, bioactivity and superior water solubility. Diverse methods and precursors have been applied for the synthesis of CDs. The possibility to scale-up the synthesis of CDs by employing Green Chemistry principles is a current research hotspot and a prerequisite for large-scale production and applications. Incorporation of CDs into polymer matrices, is another emerging research area with wide potential application range. This approach endows additional desirable functions and enables easy handling and reuse. This review summarizes recent progress regarding the green synthesis of CDs, the fundamental strategies for the construction of CD/polymer nanocomposites and the state-of-art applications of the CD/polymer nanocomposites in the realm of energy storage, environment and biomedicine. Finally, the outlook including challenges and future potential of CDs and CD/polymer composites are discussed.