The high morbidity and mortality rates associated with cancer necessitate innovative strategies, as traditional therapies often demonstrate limited efficacy in advanced stages primarily due to drug resistance and collateral damage to healthy tissues. Nanomaterial-mediated photodynamic therapy (PDT) has emerged as a promising anticancer approach effectively addressing the limitations of traditional modalities such as surgery, radiotherapy, and chemotherapy. PDT employs photosensitizer (PS) that, upon light activation, generates reactive oxygen species (ROS) to selectively target and destroy malignant cells while preserving the surrounding healthy tissue. This chapter systematically reviews advancements in nanobiotechnology that have revolutionized efficacy of PDT through the use of nanomaterials. These materials can serve as PS or multifunctional carriers, improving the stability and tumor-targeting capabilities of PS and enabling the combinatorial therapeutic approaches through co-delivery of additional therapeutic agents. The discussion encompasses various types of nanoparticles, including quantum dots (QDs), carbon dots (CDs), metal-organic frameworks (MOFs), organic polymers, upconversion nanoparticles (UCNPs), and X-ray-excited scintillators, highlighting their roles in optimizing PDT outcomes. Furthermore, this chapter delves into the synergistic potential of combining PDT with other therapeutic strategies, including photothermal therapy (PTT), radiotherapy (RT), chemotherapy, chemodynamic therapy (CDT), and immunotherapy, to address the intrinsic limitations of monotherapy PDT. Despite promising advancements, challenges remain, including the influence of the tumor microenvironment (TME) on ROS generation, the photostability of PS, and the biocompatibility of nanomaterials. Addressing these challenges is crucial for the successful clinical translation of nanomaterial-based PDT. Finally, this chapter aims to provide insights into the future of PDT, emphasizing the necessity for personalized treatment approaches and the development of intelligent, biodegradable nanomaterials that can enhance therapeutic efficacy while minimizing side effects.