Oral leukoplakia is a predominantly white lesion of the oral mucosa that cannot be classified as any other definable lesion with the risk of progressing into malignancy. Despite the advancements in conventional therapy, the rates of malignant transformation remain notably high, affecting 4.11% of adults, due to the difficulty of accurate diagnosis and indistinct treatment. Photodynamic therapy (PDT), being a minimally invasive surgical intervention, employs a variety of factors, including light, nano-photosensitizers (PSs) and oxygen in the management of precancerous lesions. PDT faces limitations in administering photosensitizers (PSs) because of their low water solubility. However, these challenges could be effectively resolved through the incorporation of PSs in nanostructured drug delivery systems, such as gold nanoparticles, micelles, liposomes, metal nanoparticles, dendrimers and quantum dots. This review will give an overview of the different innovative PS approaches in the management of premalignant lesions, highlighting the most recent advancements. From a clinical perspective, it is expected that nanotechnology will overcome barriers faced by traditional therapeutics and will address critical gaps in clinical cancer care.