Photothermal therapy (PTT), which employs nanoscale transducers delivered into a tumor to locally generate heat upon irradiation with near-infrared light, shows great potential in killing cancer cells through hyperthermia. The efficacy of such a treatment is determined by a number of factors, including the amount, distribution, and dissipation of the generated heat, as well as the type of cancer cell involved. The amount of heat generated is largely controlled by the number of transducers accumulated inside the tumor, the absorption coefficient and photothermal conversion efficiency of the transducer, and the irradiance of the light. The efficacy of treatment depends on the distribution of the transducers in the tumor and the penetration depth of the light. The vascularity and tissue thermal conduction both affect the dissipation of heat and thereby the distribution of temperature. The successful implementation of PTT in the clinic setting critically depends on techniques for real-time monitoring and management of temperature.