The combination of light and chemicals to treat skin diseases is widely practiced in dermatology. Within this broad use of light and drugs, in recent years the concept of photodynamic therapy (PDT) has emerged. PDT is a promising modality for the management of various tumors and nonmalignant diseases, based on the combination of a photosensitizer that is selectively localized in the target tissue and illumination of the lesion with visible light, resulting in photodamage and subsequent cell death. Moreover, the fluorescence of photosensitizing compounds is also utilized as a helpful diagnostic tool for the detection of neoplastic tissue. Intensive basic and clinical research culminated in the worldwide approval of PDT for bladder, esophageal, and lung cancer. The expanding use of this relatively new therapeutic modality in dermatology at many centers around the world has revealed its efficacy for the treatment of cutaneous precancer and cancer, as well as selected benign skin disorders. The following article summarizes the main principles of PDT considering the most recent developments and provides a comprehensive synopsis of the present status of the use of PDT in dermatology. (J Am Acad Dermatol 2000;42:389-413.) Learning Objective: At the conclusion of this learning activity, participants should be able to describe the basic concepts of PDT, including fundamental knowledge of the most relevant photosensitizers, the light sources, the mechanisms involved in PDT-mediated cell destruction, as well as the indications and limitations of photodynamic treatment of skin diseases.