It is more than 25 years since photodynamic therapy (PDT) was proposed as a useful tool in oncology, but the approach is only now being used more widely in the clinic. The understanding of the biology of PDT has advanced, and efficient, convenient, and inexpensive systems of light delivery are now available. Results from well-controlled, randomised phase III trials are also becoming available, especially for treatment of non-melanoma skin cancer and Barrett's oesophagus, and improved photosensitising drugs are in development. PDT has several potential advantages over surgery and radiotherapy: it is comparatively non-invasive, it can be targeted accurately, repeated doses can be given without the total-dose limitations associated with radiotherapy, and the healing process results in little or no scarring. PDT can usually be done in an outpatient or day-case setting, is convenient for the patient, and has no side-effects. Two photosensitising drugs, porfirmer sodium and temoporfin, have now been approved for systemic administration, and aminolevulinic acid and methyl aminolevulinate have been approved for topical use. Here, we review current use of PDT in oncology and look at its future potential as more selective photosensitising drugs become available.