Photoluminescent carbon nanoparticles, or carbon dots, are an emerging class of materials that has recently attracted considerable attention for biomedical and energy applications. They are defined by characteristic sizes of <10nm, a carbon-based core and the possibility to add various functional groups at their surface for targeted applications. These nanomaterials possess many interesting physicochemical and optical properties, which include tunable light emission, dispersibility and low toxicity. In this Review, we categorize how chemical tools impact the properties of carbon dots. We look for pre- and postsynthetic approaches for the preparation of carbon dots and their derivatives or composites. We then showcase examples to correlate structure, composition and function and use them to discuss the future development of this class of nanomaterials.