Photodynamic therapy (PDT) is a clinically established and highly evolving treatment modality for cancer. PDT utilizes a light responsive drug called photosensitizer that selectively destroys tumor cells upon light irradiation. Squaraines are a class of dyes possessing all favorable characteristics of a photosensitizer and have been considered to be a potent candidate for next generation PDT. In this study we chose an iodo derivative of squaraine called diiodo-squaraine (bis(3, 5-diiodo-2,4,6-trihydroxyphenyl)squaraine) which has been reported for its tumor specificity but least studied for its cellular and molecular functions. Our studies revealed that the iodo derivative of squaraine possess maximum photodynamic activity in human breast cancer cells MDA- MB- 231 and had very little cytotoxicity in normal breast cells MCF-10A. We analyzed its pro and anti-apoptotic events initiated by oxidative stress exploring a proteomic approach and delineated other critical molecular pathways and key proteins involved in regulating the complex network of cellular response upon PDT. Our study showed that, diiodo- squaraines predominantly accumulate in mitochondria and induce mitochondria-mediated apoptosis. Our study also reveals the novel mechanistic role of diiodo-squaraines to induce oxidative stress there by activating both protective and death inducing pathways post PDT.