Carbon quantum dots (CQDs), a novel fluorescent nanomaterial, have been extensively employed/explored in various applications, that is, biosensors, bioimaging, nanomedicine, therapeutics, photocatalysis, electrocatalysis, energy storage system, and so forth. In this study, we report the synthesis, characterization, and the application of phosphorus-doped CQDs (PCQDs), synthesized using trisodium citrate and phosphoric acid by the hydrothermal method. The effect of phosphorus doping on optical features and the formation of PCQDs have been explored elaborately by controlling the concentrations of precursors, reaction time, and the temperature. The fluorescent quantum yield for PCQDs was determined to be 16.1% at an excitation/emission wavelength of 310/440 nm. Also, the optical and structural properties of PCQDs were determined by using various spectroscopic and microscopic techniques. Static quenching of fluorescence was determined upon the addition of Fe3+ to PCQDs because of the formation of the fluorescent inactive complex (PCQDs-Fe3+). Hence, this chemistry leads to the development of a new fluorometric assay for the detection of Fe3+. The lower limit of Fe3+ detection is determined to be 9.5 nM (3σ/slope), with the linear fit from 20 nM to 3.0 μM (R 2 = 0.99). We have validated this new assay in the raw, ejected, and purified water samples of the RO plant by the standard addition method. These results suggest the possibility of developing a new commercial assay for Fe3+ detection in blood, urine, and various industrial waste and sewage water samples. Furthermore, recycling the pollutant water into the freshwater using filters that consist of PCQDs offers a great deal. Copyright © 2020 American Chemical Society.