Nano-formulation has generated attention in the battle against cancer, because of its great flexibility, reduced adverse side effects, and accuracy in delivering drugs to target tissues dependent on the size and surface characteristics of the disease. The field of photodynamic treatment has advanced significantly in the past years. Photodynamic techniques that use nano-formulations have surfaced to further the field of nanotechnology in medicine, especially in cancer treatment. The pharmaceutical industry is seeing a growing trend toward enhanced drug formulation using nano-formulations such as liposomes, polymeric nanoparticles, dendrimers, nano-emulsions, and micelles. Natural extracts have also shown adverse effects when employed as photosensitizers in cancer therapy because they are cytotoxic when activated by light. Still, natural photosensitizers are a big part of cancer treatment. However, some shortcomings can be minimized by combining nano-formulations with these natural photosensitizers. The synergistic improvement in medication delivery that maintains or increases the mechanism of cell death in malignant cells has also been demonstrated by the combination of photodynamic therapy with nano-formulations and natural photosensitizers. Lastly, this review assesses the feasibility and potential of a photodynamic therapy system based on nano-formulations and natural photosensitizers in clinical treatment applications and briefly discusses the removal of toxic compounds associated with nano-formulations within cells.