In this study, we prepared nitrogen-doped carbon dots (xNCDs) using hydrothermally-treated bitter tea oil residue with urea for the detection of metal ions by monitoring the photoluminescence quenching. The quantum yields of the xNCDs increased from approximately 3.85% (CDs) to 5.5% (3NCDs) and 7.2% (1NCDs), revealing that nitrogen doping effectively increases the fluorescence emission. The increased emission of the xNCDs can be attributed to radiative recombination resulting from the π-π* transition of the C=C or the n-π* transition between the C=O or N=O of sp units. Moreover, the CDs have abundant surface-attached phenolic and hydroxyl groups that coordinate with Fe ions and quench the fluorescence. Conversely, Hg ions preferentially adsorb on nitrogen-containing groups, such as amide-carbonyl groups (O=C-NH) and pyridinic and pyrrolic functionalities, on the surface of the NCDs owing to their strong affinity, quenching the substantial photoluminescence emissions. Our results suggest that bitter tea oil residue-derived carbon dots can be used to selectively detect metal ions, such as Fe and Hg, by doping with nitrogen using urea as a nitrogen precursor.