Photodynamic therapy (PDT) has become an established treatment modality for dermatooncologic conditions like actinic keratosis, Bowen's disease, in situ squamous cell carcinoma and superficial basal cell carcinoma. There is also great promise of PDT for many non-neoplastic dermatological diseases like localized scleroderma, acne vulgaris, granuloma anulare and leishmaniasis. Aesthetic indications like photo-aged skin or sebaceous gland hyperplasia complete the range of applications. Major advantages of PDT are the low level of invasiveness and the excellent cosmetic results. Here, we review the principal mechanism of action, the current developments in the field of photosensitizers and light sources, practical aspects of topical PDT and therapeutical applications in oncologic as well as non-oncologic indications.