Topical photodynamic therapy is a widely approved therapy for actinic keratoses and low-risk nonmelanoma skin cancers with a rapidly growing range of emerging indications for other cutaneous diseases. This review summarizes the best-available evidence to provide a clinical update for dermatologists on the approved and emerging indications of photodynamic therapy. The body of evidence suggests that photodynamic therapy is superior or noninferior to other available treatment modalities for actinic keratoses, low-risk basal cell carcinomas, Bowen’s disease, skin field cancerization, chemoprevention of keratinocyte carcinomas in organ transplant recipients, photoaging, acne vulgaris, and cutaneous infections including verrucae, onychomycosis, and cutaneous leishmaniasis. There is emerging evidence that photodynamic therapy plays a role in the management of actinic cheilitis, early-stage mycosis fungoides, extramammary Paget disease, lichen sclerosis, and folliculitis decalvans but there are no comparative studies with other active treatment modalities. Common barriers to topical photodynamic therapy include procedural pain, costs, and the time required for treatment delivery. There is significant heterogeneity in the photodynamic therapy protocols reported in the literature, including different photosensitizers, light sources, number of treatments, time between treatments, and use of procedural analgesia. Topical photodynamic therapy should be considered in the management of a spectrum of inflammatory, neoplastic, and infectious dermatoses. However, more comparative research is required to determine its role in the treatment algorithm for these dermatologic conditions and more methodological research is required to optimize photodynamic therapy protocols to improve the tolerability of the procedure for patients.