In this work, a novel carbon dots based complex with sulfosalicylic acid modification (CDs-SSA) was synthesized, endowing it with both corrosion inhibition and corrosion sensing abilities. The corrosion inhibition behaviors of CDs-SSA for carbon steel in HCl solution were investigated using electrochemical methods, surface characterization and molecular simulation. Compared with CDs, SSA and their mixture, the corrosion inhibition performance of CDs-SSA complex was greatly improved, showing the anodic passivation behavior and much increased impedance modulus. The corrosion inhibition efficiency of CDs-SSA reached the maximum of 99.1% at 200 mg/L after 24 h of immersing the steel in 1 M HCl solution. According to surface analyses results, CDs-SSA provided a superior corrosion inhibition effect via developing a physicochemical adsorption film with hydrophobicity to prevent the attack of corrosive media. Meanwhile, DFT and MD simulations clarified that the CDs-SSA complex with abundant active sites would adsorb on the metal surface in a parallel manner, offering the maximum coverage with highest binding energy. Furthermore, CDs-SSA could visually and sensitively respond to both Fe²⁺ and Fe³⁺ ions, which illustrated a prominent fluorescence quenching effect upon complexation with iron ions. Such efficient responsiveness of CDs-SSA offers a great opportunity for the real-time visualization of early-stage corrosion process.