Photodynamic therapy (PDT) was discovered over one hundred years ago when it was observed that certain dyes could kill microorganisms when exposed to light in the presence of oxygen. Since those early days, PDT has mainly been developed as a cancer therapy and as a way to destroy proliferating blood vessels. However, recently it has become apparent that PDT may also be used as an effective antimicrobial modality and a potential treatment for localized infections. This review discusses the similarities and differences between the application of PDT for the treatment of microbial infections and for cancer lesions. Type I and type II photodynamic processes are described, and the structure-function relationships of optimal anticancer and antimicrobial photosensitizers are outlined. The different targeting strategies, intracellular photosensitizer localization, and pharmacokinetic properties of photosensitizers required for these two different PDT applications are compared and contrasted. Finally, the ability of PDT to stimulate an adaptive or innate immune response against pathogens and tumors is also covered.