This review focuses on the research progress related to carbon dots (CDs) derived from Chinese herbal medicines and tea, covering preparation methods, physicochemical properties, and application fields. It elaborates on preparation approaches like hydrothermal, solvothermal, microwave-assisted, and ultrasonic-assisted methods, and their influence on CDs' structure and properties. It also explores CDs' structural and optical properties. The application fields include antibacterial, sensing, bioimaging, photocatalysis, hemostasis, and energy. Carbon dots show antibacterial activity by destroying bacterial cell membranes, they can detect various substances in sensing, are important for bioimaging, degrade organic pollutants in photocatalysis, have hemostatic and anti-inflammatory effects, and can be used as battery anode materials. Despite progress, challenges remain in improving yield, quantum yield, property control, and understanding their mechanism of action. This review provides a reference for related research and looks ahead to future directions.