Nanoparticles are promising scaffolds for applications such as imaging, chemical sensors and biosensors, diagnostics, drug delivery, catalysis, energy, photonics, medicine, and more. Surface functionalization of nanoparticles introduces an additional dimension in controlling nanoparticle interfacial properties and provides an effective bridge to connect nanoparticles to biological systems. With fascinating photoluminescence properties, carbon dots (C-dots), carbon-containing nanoparticles that are attracting considerable attention as a new type of quantum dot, are becoming both an important class of imaging probes and a versatile platform for engineering multifunctional nanosensors. In order to transfer C-dots from proof-of-concept studies toward real world applications such as in vivo bioimaging and biosensing, careful design and engineering of C-dot probes is becoming increasingly important. A comprehensive knowledge of how C-dot surfaces with various properties behave is essential for engineering C-dots with useful imaging properties such as high quantum yield, stability, and low toxicity, and with desirable biosensing properties such as high selectivity, sensitivity, and accuracy. Several reviews in recent years have reported preparation methods and properties of C-dots and described their application in biosensors, catalysis, photovoltatic cells, and more. However, no one has yet systematically summarized the surface engineering of C-dots, nor the use of C-dots as fluorescent nanosensors or probes for in vivo imaging in cells, tissues, and living organisms. In this Account, we discuss the major design principles and criteria for engineering the surface functionality of C-dots for biological applications. These criteria include brightness, long-term stability, and good biocompatibility. We review recent developments in designing C-dot surfaces with various functionalities for use as nanosensors or as fluorescent probes with fascinating analytical performance, and we emphasize applications in bioimaging and biosensing in live cells, tissues, and animals. In addition, we highlight our work on the design and synthesis of a C-dot ratiometric biosensor for intracellular Cu(2+) detection, and a twophoton fluorescent probe for pH measurement in live cells and tissues. We conclude this Account by outlining future directions in engineering the functional surface of C-dots for a variety of in vivo imaging applications, including dots with combined targeting, imaging and therapeutic-delivery capabilities, or high-resolution multiplexed vascular imaging. With each application C-dots should open new horizons of multiplexed quantitative detection, high-resolution fluorescence imaging, and long-term, real-time monitoring of their target.