The healing power of light has attracted interest for thousands of years. Scientific discoveries and technological advancements in the field have eventually led to the emergence of photodynamic therapy, which soon became a promising approach in treating a broad range of diseases. Based on the interaction between light, molecular oxygen, and various photosensitizers, photodynamic therapy represents a non-invasive, non-toxic, repeatable procedure for tumor treatment, wound healing, and pathogens inactivation. However, classic photosensitizing compounds impose limitations on their clinical applications. Aiming to overcome these drawbacks, nanotechnology came as a solution for improving targeting efficiency, release control, and solubility of traditional photosensitizers. This paper proposes a comprehensive path, starting with the photodynamic therapy mechanism, evolution over the years, integration of nanotechnology, and ending with a detailed review of the most important applications of this therapeutic approach.