Carbon Dots (CDs) are nanomaterials of size range 1–10 nm with unique optical, chemical and biological properties, which make them suitable for numerous applications in the biomedical field. Biomedical engineering, which integrates nanotechnology and material science, has significantly increased the use of CDs in medical research, especially in the development of nanobiosensors for the detection of diseases. A nanobiosensor is an analytical device that consists of a nanocarrier integrated with a detection bioelement, such as DNA, antibody, cells or other biomolecules that can bind to the biological counterpart, which is present in the samples. This enables the detection and quantification of biomarkers, which are highly specific for each disease. CDs possess good thermal conductivity, electron transfer property, small size, and high surface/volume ratio, essentially making them appropriate candidates for nanobiosensor development. By these properties, CDs exhibit excellent detection limits, higher sensitivity and selectivity, and good biocompatibility and are used as the sensing component of a nanobiosensor. Utilisation of nanobiosensors in the early diagnosis of diseases provides patients with a greater opportunity for successful recovery, especially in cases of life-threatening diseases. This chapter summarizes CD-based nanobiosensors, their applications, associated challenges and future perspectives for use in the biomedical field.