<p>Plastic waste represents a significant environmental concern due to its persistent non-biodegradability and the vast quantities generated globally. A promising solution involves converting this waste into value-added nanomaterials, particularly carbon dots (CDs), which exhibit distinctive photophysical properties. Among these, plastic waste-derived carbon dots (PW-CDs) have emerged as sustainable, low-cost, and efficient fluorescent nanomaterials with remarkable optical features, such as excitation-dependent emission, strong photostability, high quantum yield, and tunable fluorescence. These properties are critical for the sensitive and selective detection of heavy metal ions in environmental and biological systems. This review focuses on recent advancements in developing PW-CDs, with particular focus on how their fluorescence mechanisms, including surface state emission, quantum confinement effects, and energy or charge transfer interactions that enable precise and effective sensing of heavy metals like Ag⁺, Cu²⁺, Hg²⁺, and Fe³⁺. We also compare PW-CDs with CDs derived from other sources, outline current challenges in achieving reproducibility and target selectivity, and explore emerging strategies in functionalization and hybrid integration. Repurposing plastic waste into functional carbon dots not only addresses the urgent issue of plastic pollution but also creates a pathway for sustainable material production with practical applications. PW-CDs exemplify an innovative approach to both environmental remediation and advanced nanotechnology.</p> Graphical Abstract <p></p>