Photodynamic diagnostics (PDD) and photodynamic therapy (PDT) are well-established medical technologies used for the diagnosis and treatment of malignant neoplasms. They rely on the use of photosensitizers, light and oxygen to visualize or eliminate cancer cells. This review demonstrates the recent advancements in these modalities with the use of nanotechnology, including quantum dots as innovative photosensitizers or energy donors, liposomes and micelles. Additionally, this literature review explores the combination of PDT with radiotherapy, chemotherapy, immunotherapy, and surgery for treating various neoplasms. The article also focuses on the latest achievements in PDD and PDT enhancements, which seem to be very promising in the field of oncology.