Carbon nanodots (C-dots) possessing photoluminescence properties have become interesting materials for sensing and imaging, with advantages of water-dispersibility, chemical and photo stability, and biocompatibility. C-dots prepared from various precursors possess different chemical and optical properties, and biological activities. They have been used for quantitation of various analytes such as copper ions and for sensing of cells. Through self-assembly, C-dots form vesicles with an average size of 103 nm. The water dispersible C-dot liposome possesses intrinsic photoluminescence (PL) and is stable against salt (e.g. 1 M NaCl) and photoirradiation. The PL of C-dot liposome can be turned off and then on under photoirradiation over the wavelength regions of 510-540 nm and 365-420 nm, respectively. Like reported C-dots, the C-dot liposome emits various colors when excited at different wavelengths. Having great stability and high contrast, images of individual C-dot liposome have been recorded, showing negligible photoblinking.