Nowadays, photothermal therapy (PTT) utilizing photothermal conversion agents (PTAs) to generate sufficient heat under near-infrared (NIR) light irradiation for tumor ablation has attracted extensive research attention. Despite the great advancement, the therapeutic efficacy of PTT in tumor treatment is still compromised by several obstacles, such as low photothermal conversion efficiency, poor stability of PTAs, inadequate tumor accumulation and cellular uptake, and thermal-resistance of tumors, as well as tumor recurrence and metastasis. In this review, we highlight recent advances in nanomaterials that focus on overcoming the above obstacles and thus enhancing the therapeutic outcome of PTT. PTAs with improved photothermal performance and modification strategies for efficient PTT are summarized, which are further classified into three main types, utilizing activatable PTAs, improving the local concentration of PTAs, and overcoming intrinsic drawbacks of PTT (e.g., heat shock responses). Furthermore, the limitations and challenges of nanomaterials for enhanced PTT are also discussed.