Photodynamic therapy is a photochemistry-based approach, approved for the treatment of several malignant and non-malignant pathologies. It relies on the use of a non-toxic, light activatable chemical, photosensitizer, which preferentially accumulates in tissues/cells and, upon irradiation with the appropriate wavelength of light, confers cytotoxicity by generation of reactive molecular species. The preferential accumulation however is not universal and, depending on the anatomical site, the ratio of tumor to normal tissue may be reversed in favor of normal tissue. Under such circumstances, control of the volume of light illumination provides a second handle of selectivity. Singlet oxygen is the putative favorite reactive molecular species although other entities such as nitric oxide have been credibly implicated. Typically, most photosensitizers in current clinical use have a finite quantum yield of fluorescence which is exploited for surgery guidance and can also be incorporated for monitoring and treatment design. In addition, the photodynamic process alters the cellular, stromal, and/or vascular microenvironment transiently in a process termed photodynamic priming, making it more receptive to subsequent additional therapies including chemo- and immunotherapy. Thus, photodynamic priming may be considered as an enabling technology for the more commonly used frontline treatments. Recently, there has been an increase in the exploitation of the theranostic potential of photodynamic therapy in different preclinical and clinical settings with the use of new photosensitizer formulations and combinatorial therapeutic options. The emergence of nanomedicine has further added to the repertoire of photodynamic therapy’s potential and the convergence and co-evolution of these two exciting tools is expected to push the barriers of smart therapies, where such optical approaches might have a special niche. This review provides a perspective on current status of photodynamic therapy in anti-cancer and anti-microbial therapies and it suggests how evolving technologies combined with photochemically-initiated molecular processes may be exploited to become co-conspirators in optimization of treatment outcomes. We also project, at least for the short term, the direction that this modality may be taking in the near future.