Two green methods (microwave and hydrothermal) were employed for the preparation of water dispersible fluorescent carbon nanoparticles (CNPs) from activated charcoal. Microwave and hydrothermally synthesized carbon nanoparticles, (MW‐CNPs) and (HT‐CNPs), respectively were characterized by microscopic and spectroscopic techniques. A detailed study of their fluorescence characteristics was made. MW‐CNPs and HT‐CNPs were tested for metal ion selectivity in aqueous medium. MW‐CNPs showed selectivity for Fe3+ among the tested metal ions and important studies such as for interference, linear range and limit of detection were carried out. The application of MW‐CNPs for detection of Fe3+ in water was demonstrated.