Tracer technology has been increasingly used in inter-well tests to investigate reservoir performance, reservoir connectivity and residual oil saturation for providing useful information to improve decision making in reservoir management. Stable nanoparticle tracers with high-sensitive real-time detectability are highly desired, and as one of the nanoparticles tracers, carbon dots (C-dots) have been studied and tested in field trial for reservoir monitoring. In this research, we report a modified method to synthesize fluorescent C-dots which fluorinated, sulfonated or zwitterionic functional groups were incorporated into the C-dots. The synthesis reactions occurred at hydrothermal conditions with inexpensive starting materials and are readily to scale up for industrial application. The synthesized C-dots are readily dispersible in brines and exhibit improved colloidal stability in high salinity and at high temperature and lowered retention in reservoir rock. Optical properties of the synthesized colloidal C-dots were studied by UV–visible and fluorescence spectroscopies, and the difference in fluorescence between the C-dots hydrothermally treated at different temperatures enables them to be used as multicolor tracers with fluorescence barcodes. Retentions of the C-dots in porous rocks were evaluated by adsorption in crushed calcite and core flooding tests with limestone, and near zero retention of the modified C-dots in reservoir rock were revealed. In molecular dynamics (MD) simulations, results show the C-dot adhesions on calcite surface follow the decreasing order: plain > sulfonated > zwitterionic > fluorinated C-dots, consistent well with experiments that the functionalized C-dots all have lowered adsorption on limestone. In comparison with those C-dots reported in literature, our results suggest that the synthesized C-dots using the modified procedure have excellent fluorescence properties, improved thermal stability, photostability, and water dispersibility, enabling their use as optically detectable nano-agent tracers for oilfield application.