Much of the current excitement surrounding nanoscience is directly connected to the promise of new nanoscale applications in cancer diagnostics and therapy. Because of their strongly resonant light-absorbing and light-scattering properties that depend on shape, noble metal nanoparticles provide a new and powerful tool for innovative light-based approaches. Nanoshellsspherical, dielectric core, gold shell nanoparticleshave been central to the development of photothermal cancer therapy and diagnostics for the past several years. By manipulating nanoparticle shape, researchers can tune the optical resonance of nanoshells to any wavelength of interest. At wavelengths just beyond the visible spectrum in the near-infrared, blood and tissue are maximally transmissive. When nanoshell resonances are tuned to this region of the spectrum, they become useful contrast agents in the diagnostic imaging of tumors. When illuminated, they can serve as nanoscale heat sources, photothermally inducing cell death and tumor remission. As nanoshell-based diagnostics and therapeutics move from laboratory studies to clinical trials, this Account examines the highly promising achievements of this approach in the context of the challenges of this complex disease. More broadly, these materials present a concrete example of a highly promising application of nanochemistry to a biomedical problem. We describe the properties of nanoshells that are relevant to their preparation and use in cancer diagnostics and therapy. Specific surface chemistries are necessary for passive uptake of nanoshells into tumors and for targeting specific cell types by bioconjugate strategies. We also describe the photothermal temperature increases that can be achieved in surrogate structures known as tissue phantoms and the accuracy of models of this effect using heat transport analysis. Nanoshell-based photothermal therapy in several animal models of human tumors have produced highly promising results, and we include nanoparticle dosage information, thermal response, and tumor outcomes for these experiments. Using immunonanoshells, infrared diagnostic imaging contrast enhancement and photothermal therapy have been integrated into a single procedure. Finally, we examine a novel "Trojan horse" strategy for nanoparticle delivery that overcomes the challenge of accessing and treating the hypoxic regions of tumors, where blood flow is minimal or nonexistent. The ability to survive hypoxia selects aggressive cells which are likely to be the source of recurrence and metastasis. Treatment of these regions has been incredibly difficult. Ultimately, we look beyond the current research and assess the next challenges as nanoshell-based photothermal cancer therapy is implemented in clinical practice.