Squaraine dyes are a class of organic compounds that exhibit some characteristics inherent to those of an “ideal photosensitizer”, such as high absorption at near-infrared-close wavelengths and to produce reactive oxygen species. The introduction of amines into their squaric ring, although known to increase the phototoxicity of squaraines, can improve dyes’ water solubility and induce bathochromic shifts compared to their unsubstituted derivatives, interesting effects in biological contexts. In this work, four new squaraines were synthesized and structurally, photophysically, and photochemically characterized (including absorption and aggregation, fluorescence, light stability, and singlet oxygen generation). Their potential as fluorescent probes for albumin detection was assessed through both in silico and in vitro approaches, as well as their suitability as potential photosensitizers for photodynamic therapy. For this last purpose, the 663 nm light-induced effects of the new dyes were evaluated against the PC-3 prostate cancer cell line, while their photocytotoxicity toward normal human dermal fibroblasts was also assessed using the MTT assay, to determine their potential tumor-selective effects. Low singlet oxygen quantum yields suggest that type I reactions predominate in generating cytotoxicity. Overall, the findings indicate that the designed squaraines exhibit moderate yet favorable interactions with albumin protein while demonstrating selective photodynamic effects toward prostate adenocarcinoma cancer cells, highlighting their potential as protein-assisted, tumor-targeted photosensitizers, providing a basis for further mechanistic studies.