Photodynamic therapy (PDT) is used in the management of neoplastic and nonmalignant diseases. Its unique mechanisms of action include direct cytotoxic effects exerted towards tumor cells, destruction of tumor and peritumoral vasculature and induction of local acute inflammatory reaction. The latter develops in response to (1) damage to tumor and stromal cells that leads to the release of cell death-associated molecular patterns (CDAMs) or damage associated molecular patterns (DAMPs), (2) early vascular changes that include increased vascular permeability, vascular occlusion, and release of vasoactive and proinflammatory mediators, (3) activation of alternative pathway of complement leading to generation of potent chemotactic factors, and (4) induction of signaling cascades and transcription factors that trigger secretion of cytokines, matrix metalloproteinases, or adhesion molecules. The majority of studies indicate that induction of local inflammatory response contributes to the antitumor effects of PDT and facilitates development of systemic immunity. However, the degree of PDT-induced inflammation and its subsequent contribution to its antitumor efficacy depend on multiple parameters, such as chemical nature, concentration and subcellular localization of the photosensitizers, the spectral characteristics of the light source, light fluence and fluence rate, oxygenation level, and tumor type. Identification of detailed molecular mechanisms and development of therapeutic approaches modulating PDT-induced inflammation will be necessary to tailor this treatment to particular clinical conditions.