Highly luminescent carbon dots (CDs) have garnered significant attention and are increasingly utilized in various fields. Despite its importance, there has been a lack of comprehensive reviews focusing specifically on highly luminescent CDs. It is aimed here to fill that gap by exploring CDs with high photoluminescence quantum yield (PLQY), starting with an examination of the luminescent mechanisms underlying highly luminescent CDs. The selection of synthetic raw materials and preparation methods along with the research progress are reviewed and the information on highly luminescent CDs across various luminescent bands is then statistically summarized in several tables. Subsequently, the structural features, synthesis methods, and purification strategies that lead to high PLQY in CDs are summarized based on analyzing collected examples of highly luminescent CDs. Furthermore, the highly luminescent-based multifunctional applications of CDs in bioimaging, light-emitting diodes, luminescent solar concentrators, and lasers are introduced. Finally, the current research landscape is evaluated, existing challenges are identified, and feasible directions are proposed for future development.