Green, economical and effective method was developed for synthesis of fluorescent carbon dots (CDs), using one-pot hydrothermal treatment of Lycii Fructus. Optical and structural properties of the CDs have been extensively studied by UV–visible and fluorescence spectroscopic, x-ray diffraction (XRD) techniques, transmission electron microscopy (TEM) and high resolution TEM (HRTEM). Surface functionality and composition of CDs has been illustrated by Fourier transform infrared spectroscopy (FTIR), x-ray photoelectron spectroscopy (XPS) spectra and elemental analysis. The fabricated CDs possess stable fluorescent properties. The fluorescent quantum yield of the CDs can reach 17.2%. The prepared CDs emitted a broad fluorescence between 415 and 545nm and their fluorescence was tuned by changing excitation wavelength. Meanwhile, the fluorescence intensity of the CDs could be significantly quenched by Fe3+ (turn-off). The CDs exhibit captivating sensitivity and selectivity toward Fe3+ with a linear range from 0 to 30μM and a detection limit of 21nM. The prepared CDs were successfully applied to the determination of Fe3+ in the urine samples, the water samples from the from the Yellow River and living HeLa (Henrietta Lacks) cells. Moreover, the low-toxicity and excellent biocompatibility of the CDs were evaluated through MTT assay on HeLa cells. The CDs were also employed as fluorescent probes for multicolor imaging of HeLa cells successfully.