Herein, we have reported a facile method to synthesize surface passivated carbon dots (CDs) with high quantum yield. The structure and optical properties of the CDs are successfully investigated using high-resolution transmission electron microscopy; dynamic light scattering; and UV-vis, fluorescence, and Fourier transform infrared spectroscopy (FTIR). The synthesized CDs with excellent water solubility have been utilized to prepare nanostructured polyaniline (PANI) where CDs act both as a dopant as well as nucleating agent. The synthesis of PANI is achieved through a simple and one pot chemical oxidative polymerization. The UV-vis and FTIR data clearly indicates the formation of highly doped PANI (emeraldine salt form), which will really be helpful for fabricating photovoltaic device. We have examined the current-voltage characteristics of CD-PANI samples both in dark and illuminated state, which evidently designates the enhancement of current in the illuminated state. Hence, we have employed the CD-PANI samples for photovoltaic study, and the DSSCs are studied under illumination of 100 mW/cm2. Among the CD-PANI samples, CDPA10 shows a maximum power conversion efficiency of 3.65%.