With the unreliability of epithelial dysplasia as a predictor to determine the risk of future malignant development, subjectivity associated in evaluating dysplasia by pathologists and paucity of biomarkers that could accurately predict the progression risks in oral potentially malignant disorders (PMDs), eradication of the lesions appears to be the most desirable approach to minimize the risk of invasive cancer formation. Interventions, such as surgery and chemoprevention, have not shown promising long-term results in the treatment of these lesions, and lack of guidelines and general consensus on their management has incited much anxiety and doubts in both patients and community clinicians. Topical photodynamic therapy (PDT) is a minimally invasive and minimally toxic technique that in recent years has shown great promise in the management of PMDs. In this review, we describe the historical developments in the field of PDT, its basic mechanisms, as well as related clinical studies, and its challenges in the management of oral PMDs. Based on its high efficacy and low side effects, its high patient acceptance/compliance, the simplicity of the procedure and its minimal pretreatment preparation, topical PDT is believed to have potential to play an important role in the management of PMDs, especially of the low-grade dysplasia.