Photodynamic therapy (PDT) is a minimally invasive clinical protocol that combines a nontoxic photosensitizer (PS), appropriate visible light, and molecular oxygen for cancer treatment. This triad generates reactive oxygen species (ROS) in situ, leading to different cell death pathways and limiting the arrival of nutrients by irreversible destruction of the tumor vascular system. Despite the number of formulations and applications available, the advancement of therapy is hindered by some characteristics such as the hypoxic condition of solid tumors and the limited energy density (light fluence) that reaches the target. As a result, the use of PDT as a definitive monotherapy for cancer is generally restricted to pretumor lesions or neoplastic tissue of approximately 1 cm in size. To expand this limitation, researchers have synthesized functional nanoparticles (NPs) capable of carrying classical photosensitizers with self-supplying oxygen as well as targeting specific organelles such as mitochondria and lysosomes. This has improved outcomes in vitro and in vivo. This review highlights the basis of PDT, many of the most commonly used strategies of functionalization of smart NPs, and their potential to break the current limits of the classical protocol of PDT against cancer. The application and future perspectives of the multifunctional nanoparticles in PDT are also discussed in some detail.