Photodynamic Therapy (PDT) is a non-invasive treatment successfully used for neoplastic, inflammatory and infectious skin diseases. One of its strengths is represented by the high safety profile, even in elderly and/or immuno-depressed subjects. PDT, however, may induce early and late onset side effects. Erythema, pain, burns, edema, itching, desquamation, and pustular formation, often in association with each other, are frequently observed in course of exposure to the light source and in the hours/days immediately after the therapy. In particular, pain is a clinically relevant short-term complication that also reduces long-term patient satisfaction. Rare complications are urticaria, contact dermatitis at the site of application of the photosensitizer, and erosive pustular dermatosis. Debated is the relationship between PDT and carcinogenesis: the eruptive appearance of squamous cell carcinoma (SCC) in previously treated areas has been correlated to a condition of local and/or systemic immunosuppression or to the selection of PDT-resistant SCC. Here we review the literature, with particular emphasis to the pathogenic hypotheses underlying these observations.