The photoluminescent properties of graphene nanoparticle (named graphene quantum dots) have attracted significant research attention in recent years owing to their profound application potential. However, the photoluminescence (PL) origin of this class of nanocarbons is still unclear. In this paper, combining direct experimental evidence enabled by a facile size-tunable oxygenated graphene quantum dots (GQDs) synthesis method and theoretical calculations, the roles of the aromatic core, functional groups and disordered structures (i.e. defects and sp3 carbon) in the PL of oxygenated GQDs are elucidated in detail. In particular, we found that the functional groups on GQDs play dual roles in the overall emission: (1) they enable π* → n and σ* → n transitions, resulting in a molecular type of PL, spectrally invariable with change of particle size or excitation energy; (2) similar to defects and sp3 carbon, functional groups also induce structural deformation to the aromatic core, leading to mid-gap states or, in other words, energy traps, causing π* → mid-gap states → π transitions. Therefore, functional groups contribute to both the blue edge and the red shoulder of GQDs’ PL spectra. The new insights on the role of functional groups in PL of fluorescent nanocarbons will enable better designs of this new class of materials.