The first-ever neomycin antibiotic-based carbon dots (Neo-CDs) were synthesized via a low-cost, eco-friendly, and single-step hydrothermal method using neomycin as a single precursor. The as-prepared Neo-CDs exhibited strong and stable blue fluorescence and were well characterized by TEM, UV-vis absorption, fluorescence emission, IR, XRD, Raman and XPS spectroscopy methods. The Neo-CDs showed a well-distributed size within the range of 4.5 to 7.8 nm, comprising various functional groups on the surface of the carbon core. The Neo-CDs exhibited exceptional emission behaviour, and fluorescence quantum yield was calculated to be 55% in double distilled water. Neo-CDs have been used as a fluorescent sensor for selective and sensitive detection of Fe3+ ions in aqueous solution in the fluorescence turn-off mode. From the set of metal ions, only the Fe3+ ion showed quenching of fluorescence due to photoinduced (PET) electron transfer from Neo-CDs to the half-filled 3d orbital of Fe3+ ions. The limit of detection for Fe3+ ions was calculated to be 0.854 μM. Further, the quenching efficiency and Stern-Volmer quenching constant have been calculated which are about 94% and 5.6 × 106 M-1, respectively.