Esophageal cancer is often diagnosed at the late stage when cancer has already spread and is characterized by a poor prognosis. Therefore, early diagnosis is vital for a better and efficient treatment outcome. Upper endoscopy with biopsy is the standard diagnostic tool for esophageal cancer but is challenging to diagnose at its premalignant stage, while conventional treatments such as surgery, chemotherapy, and irradiation therapy, are challenging to eliminate the tumor. Photodynamic diagnosis (PDD) and therapy (PDT) modalities that employ photosensitizers (PSs) are emerging diagnostic and therapeutic strategies for esophageal cancer. However, some flaws associated with the classic PSs have limited their clinical applications. Functionalized nanomedicine has emerged as a potential drug delivery system to enhance PS drug biodistribution and cellular internalization. The conjugation of PSs with functionalized nanomedicine enables increased localization within esophageal cancer cells due to improved solubility and stability in blood circulation. This review highlights PS drugs used for PDD and PDT for esophageal cancer. In addition, it focuses on the various functionalized nanomedicine explored for esophageal cancer and their role in targeted PDD and PDT for diagnosis and treatment.