This study focuses on the synthesis of SiO2-coated carbon dots (CDs) grafted onto YAlO3:Cr3+ (YAP:Cr3+) nanophosphors (NPs) through a combustion method. The CDs enhance the absorption cross-section of Cr3+ ions, significantly boosting the luminescence of YAP:Cr3+ by 19.29-fold. Further improvement is achieved with a SiO2 coating, leading to a 48.73-fold increase in photoluminescence intensity. The NCs are colour tunable, with emissions ranging from pinkish-red to blue, depending on the concentration of CDs and the excitation wavelength. These properties make them suitable for diverse applications, such as ratio metric fluorescence sensors for detecting Fe3+ ions within the 0–350 µM range, with high sensitivity (0.2 µM) and a low detection limit (4.93 μM). Additionally, they serve as material for white light-emitting diodes (W-LEDs), achieving CIE coordinates of (0.31, 0.30) and a rendering index of 94. The NCs also function as an optical thermometer with a sensitivity of 0.31 % K−1 at 320 K, making them ideal for temperature sensing applications. Moreover, their stability and dual-emissive nature make them highly effective in latent fingerprints (LFPs) detection, enabling high-resolution, level III fingerprint analysis. The dual emission properties of CDs and Cr3+ ions position these NCs as multifunctional materials, suitable for optical sensing, lighting, and security applications.