Carbon dots (CDs) are categorized as an emerging class of zero-dimension nanomaterials having high biocompatibility, photoluminescence, tunable surface, and hydrophilic property. CDs, therefore, are currently of interest for bio-imaging and nano-medicine applications. In this work, polyethylene glycol functionalized CDs (CD-PEG) were prepared from oil palm empty fruit bunch by a one-pot hydrothermal technique. PEG was chosen as a passivating agent for the enhancement of functionality and photoluminescence properties of CDs. To prepare the CDs-PEG, the effects of temperature, time, and concentration of PEG were investigated on the properties of CDs. The as-prepared CDs-PEG were characterized by several techniques including dynamic light scattering, high-resolution transmission electron microscopy, X-ray photoelectron spectroscopy, fluorescence spectroscopy, Raman spectroscopy, Fourier-transform infrared spectroscopy and Thermogravimetric analysis. The as-prepared CDs under hydrothermal condition at 220 °C for 6 h had spherical morphology with an average diameter of 4.47 nm. Upon modification, CDs-PEG were photo-responsive with excellent photoluminescence property. The CDs-PEG was subsequently used as a drug carrier for doxorubicin [DOX] delivery to CaCo-2, colon cancer cells in vitro. DOX was successfully loaded onto CDs-PEG surface confirmed by FT-IR and Matrix-Assisted Laser Desorption/Ionization Time-of-Flight Mass Spectrometer (MALDI-TOF/MS) patterns. The selective treatment of CDs-PEG-DOX against the colorectal cancer cells, , relative to normal human fibroblast cells was succesfully demonstrated.