Using light as the sole stimulus and employing the generated singlet oxygen as a therapeutic agent and the trigger to activate chemo-drug release could serve as an elegant way to bring into full play the advantageous features of light and enhance therapeutic efficacy through a combination of chemotherapy and photodynamic therapy. Herein a liposomal drug system has been developed by embedding a fluorescent photosensitizer and a prodrug into phospholipid vesicles. Upon one- or two-photon light irradiation, the photosensitizer generates singlet oxygen, which removes the protecting group of the prodrug and subsequently causes the release of the active drug chlorambucil. With the combined action of O21 and chlorambucil, highly controllable cytotoxicity toward cancer cells was achieved. In addition, the fluorescent photosensitizer gives out fluorescent signal acting as the drug monitoring agent. This strategy may provide an efficient approach for cancer treatment and some useful insights for designing light-stimulated on-demand therapeutic systems.