Despite the rapid development of science and technology, the effective treatment of cancer still threatens human life and health. However, the success of cancer treatment is closely related to early diagnosis, identification, and effective treatment. In recent years, with the strengthening of the development and research of nanomaterials for cancer diagnosis and treatment, researchers have found that carbon dots (CDs) have the advantages of wide absorption, excellent biocompatibility, diverse imaging characteristics, and photostability and are widely used in various fields, such as sensing, imaging, and drug/gene transportation. Recently, researchers also discovered that CDs could be used as an effective photosensitizer to generate active oxygen or convert light energy into heat under the stimulation of the external lasers, making them have the effects of photothermal and photodynamic therapy for cancer. In this review, we first outline the single-modal and multimodal imaging analysis of CDs in cancer cells. After introducing diversified imaging functions, we focused on the design and the latest research progress of CDs in phototherapy and introduced in detail the strategies of CDs in phototherapy treatment and the challenges faced by clinical applications. We hope that this overview can provide important insights for researchers and accelerate the pace of research on CDs in imaging-guided phototherapy treatment.