Some new types of Rose Bengal dye-encapsulated cinnamon nanoparticles (RB-CNPs) were prepared via the laser ablation in liquid (PLAL) method at various laser fluences (LFs) and characterized. The influence of different LF (1.7–14.2 Jcm−2) on the absorption, fluorescence and color chromaticity properties of these RB-CNPs was evaluated. Both fluorescence and absorption spectra of the RB-CNPs displayed two prominent peaks at approximately 439 nm and 571 nm, and 267 nm and 546 nm, respectively due to the presence of phenolic acids in CNPs and structural units in RB dye. The fluorescence lifetime and quantum yield were in the range of 6.12–6.911 ns and 0.341–0.61%. Furthermore, these RB-CNPs coated fiber-optic sensor showed very fast response when exposed to ethylene glycol medium. It is established that the proposed optically active and stable RB-CNPs can be advantageous designing low-cost fiber-optic sensors useful for environmental tracers and optical probes.