Carbon dots (CDs) are a new class of carbon-based luminescence materials with fascinating properties. They have been given great expectations on superseding traditional semiconductor quantum dots due to their good dispersity and stability, relatively low toxicity, superior resistance to photobleaching, and excellent biocompatibility. The diversified luminescence properties of CDs are largely due to the synthetic strategies and precursors. In view of those described above, this study has explored the possibility to establish a facile one-step hydrothermal method for the one-pot synthesis of folic acid-modified cerium-doped CDs (Ce-CDs-FA), which could be further utilized as a sensitive fluorescent nanoprobe for biosensing. This investigation demonstrates that the Ce-CDs-FA nanocomposites have nice biocompatibility and bright fluorescent properties, which can be readily utilized to detect cancer cells through recognizing overexpressing folate receptors by virtue of folic acid. Meanwhile, it is noted that the Fe3+ ion can actualize a specific and hypersensitive quenching effect for these Ce-CDs-FA nanocomposites, which can be further explored for special ion recognition, including iron ions. It raises the possibility that the as-prepared Ce-CDs-FA nanocomposites could be extended as a dual fluorescence sensor for targeted cell imaging and Fe3+ ion detection.