Photodynamic therapy (PDT) uses exogenously administered or endogenously formed photosensitizers activated by light to induce cell death via formation of singlet oxygen and other free radicals. Photodynamic therapy is increasingly used for the treatment of skin cancers and other indications. The efficacy of PDT depends on the structure of the photosensitizer, the administration modality, the light source, and the treatment procedure. We reviewed the most recent clinical and experimental developments in PDT research related to dermatology. The substrate under most intense investigation in PDT research is delta-aminolevulinic acid (ALA). Photodynamic therapy with topically applied ALA has been shown to be highly efficient in the treatment of cutaneous neoplasms by using intralesionally formed porphyrins as photosensitizers. For solar keratoses, best response rates have been described. delta-Aminolevulinic-PDT is also efficient in the treatment of superficial basal cell and squamous cell carcinomas. In addition, the fluorescence of ALA-induced porphyrins under a Wood light is highly selective in neoplastic cutaneous tissue and offers a useful technique in detecting and delineating skin tumors with ill-defined borders.