In this study, a simple and efficient method for synthesizing nitrogen-doped carbon quantum dots (N-CQDs) has been developed through a one-step hydrothermal process using hedyotis diffusa willd. The morphology, chemical composition, and optical properties of the resulting N-CQDs were thoroughly characterized. The synthesized N-CQDs exhibited a spherical shape with an average particle size of 4.32 nm, and the crystal lattice spacing was determined to be 0.17 nm. Notably, the N-CQDs demonstrated a significant fluorescence quenching effect in the presence of Fe⁺ ions, exhibiting high selectivity and sensitivity. The detection limit for Fe⁺ ions was found to be 6.62 × 10⁻ μmol/L within a linear range of 0.01-0.1 μmol/L. Furthermore, the N-CQDs displayed significant antimicrobial activity against both Gram-positive (Staphylococcus aureus) and Gram-negative (Escherichia coli) bacteria, with minimum inhibitory concentration (MIC) values of 0.055 mg/mL and 0.038 mg/mL, respectively. These findings suggest that the N-CQDs can serve as an effective fluorescent sensor and a promising antibacterial agent. This work provides a new strategy for the preparation of N-CQDs from natural plant sources, highlighting their potential applications as both fluorescent sensors and antimicrobial agents.