Photodynamic therapy (PDT), a new treatment modality for localized cancers involving the selective interaction of visible light with photosensitizers, such as hematoporphyrin derivatives (HpD) or dihematoporphyrin ether/ester (DHE) (Photofrin II). Photodynamic therapy of malignant tumors includes biological, photochemical and photophysical processes. These processes involve: (i) absorption of photosensitizing agent; (ii) selective retention of photosensitizer in tumors and (iii) irradiation of sensitized tumor by laser irradiation. This paper provides a review of photosensitizers, photochemistry, subcellular targets, side effects and lasers involved in photodynamic therapy. In addition, gradual increase in knowledge related to in vivo and in vitro mechanisms of action of PDT, as well as some clinical applications of photodynamic therapy are presented.