Carbon nanodots (CNDs) are emerging nanomaterials known for their exceptional photoluminescence, high biocompatibility, and adaptable surface chemistry, enabling diverse applications in bioimaging, sensing, and energy systems. As their use grows, assessing their environmental toxicity has become critical. This chapter critically examines current research into CND ecotoxicity, particularly their effects on aquatic and terrestrial organisms. Biological outcomes vary widely based on synthesis methods, surface modifications, concentration, and test conditions. While many CNDs show low acute toxicity, sublethal effects such as oxidative stress, membrane disruption, and altered metabolism have been observed in multiple species. Additionally, environmental behaviors like aggregation, dissolution, and interactions with other pollutants further modulate their toxicity. These factors complicate risk assessment and highlight major knowledge gaps. The chapter emphasizes the urgent need for standardized testing protocols to better evaluate ecological risks and ensure the responsible development of CND-based technologies.