AbstractCarbon dots (CDs) have become one of the most emerging materials as an alternative solar light‐induced photocatalyst in contrast to traditional metal‐based systems. However, one of the major challenges is the lack of visible light absorption. Herein, we have fabricated unique N, P‐co‐doped CDs with a self‐assembled onion‐like layered structure by using a bottom‐up facile synthesis technique from chitosan gel and phosphoric acid as molecular precursors. This typical layered structure of N, P‐co‐doped carbon nano onions (N, P‐CNOs), with an average size of 25–50 nm, displays an enhanced visible light absorption. Detailed structural and elemental characterizations confirm the extensive aromatic domain with P‐containing surface functionalities, while electrochemical study clarifies the lowering of band gaps as well as the creation of new electronic states in comparison to the pristine N‐CDs. Furthermore, the intrinsic structural features are correlated with the underpinning photophysical processes by steady‐state and time‐resolved fluorescence spectroscopy. In addition, steady‐state polarized emission and thermo‐responsive PL properties have been carried out to unveil further the structure‐property correlation of N, P‐CNOs, and their comparative study with pristine N‐CDs at the different excitation wavelengths. Finally, N, P‐CNOs exhibit efficient visible‐light‐induced photocatalysis, and the detailed mechanistic study is carried out by trapping the photogenerated species in an aqueous medium. The prepared N, P‐CNOs displayed an excellent visible‐light photocatalytic performance over MB dye with a degradation efficiency of 75.8% within 120 min along with a degradation rate constant of ∼0.0109 min⁻¹. It is concluded that the easy to synthesize and low‐cost N, P‐CNOs with a unique morphology hold great potential for application in visible‐light photocatalysis.