The development of pharmaceutical analytical techniques is one of the most crucial steps in drug development and quality control. The pharmaceuticals serve their intent only if their content is labeled, free from impurities, and are administered in an appropriate amount. Thus, an accurate, selective, low-cost, and fast analytical tool is highly required. Carbon nanodots (CDs), as emerging luminescent nanomaterials in analytical applications, play a significant role in offering low detection limit, superior selectivity, high sensitivity, low-cost precursors, biocompatible, and facile preparation protocols. Recently, many papers have been reported on the quantification and detection of various active pharmaceutical ingredients using CDs. Owing to the luminescence of CDs, a big concern is given to fluorescence-based probes. This review article highlights the physical and chemical properties of CDs, their synthesis approaches, surface functionalization, detection mechanisms, and several detection platforms, such as fluorescence, electrochemical, electrochemiluminescence, colorimetry, and surface plasmon resonance for pharmaceutical analysis based on CDs.