The clinical need for photodynamic therapy (PDT) has been growing for several decades. Notably, PDT is often used in oncology to treat a variety of tumors since it is a low-risk therapy with excellent selectivity, does not conflict with other therapies, and may be repeated as necessary. The mechanism of action of PDT is the photoactivation of a particular photosensitizer (PS) in a tumor microenvironment in the presence of oxygen. During PDT, cancer cells produce singlet oxygen (¹O₂) and reactive oxygen species (ROS) upon activation of PSs by irradiation, which efficiently kills the tumor. However, PDT's effectiveness in curing a deep-seated malignancy is constrained by three key reasons: a tumor's inadequate PS accumulation in tumor tissues, a hypoxic core with low oxygen content in solid tumors, and limited depth of light penetration. PDTs are therefore restricted to the management of thin and superficial cancers. With the development of nanotechnology, PDT's ability to penetrate deep tumor tissues and exert desired therapeutic effects has become a reality. However, further advancement in this field of research is necessary to address the challenges with PDT and ameliorate the therapeutic outcome. This review presents an overview of PSs, the mechanism of loading of PSs, nanomedicine-based solutions for enhancing PDT, and their biological applications including chemodynamic therapy, chemo-photodynamic therapy, PDT-electroporation, photodynamic-photothermal (PDT-PTT) therapy, and PDT-immunotherapy. Furthermore, the review discusses the mechanism of ROS generation in PDT advantages and challenges of PSs in PDT.