Extracorporeal photopheresis (ECP) is a cell-based immunotherapy that involves the reinfusion of autologous leukocytes after exposure to psoralen and UVA. The treatment has been used for over 30 years, at first on patients with cutaneous T-cell lymphoma (CTCL) and later for the management of patients with graft-versus-host disease (GvHD), sclerosing disorders, atopic dermatitis, and other diseases that may share the common driving factor of a pathogenic T-cell clone or clones in blood circulation. Patients with clinical improvement mount an antigen-specific immune response that may have tolerance traits in the case of GvHD or anticlonal cytotoxic characteristics in the case of CTCL. The exact mechanisms that dictate one response or the other are not fully understood, but the evidence accumulated so far indicates that multiple events occur simultaneously and consequentially contribute to the end result. These include contact of cells with the outside (plastics and tubing of the ECP apparatus), exposure to psoralen and UVA that activates platelets, monocytes, and other myeloid cells, the release of damage-associated molecular patterns, differentiation of monocytes into dendritic cells, and generation and successive presentation of numerous antigens after the phagocytosis of apoptotic cells. Once reintroduced, the ECP product increases the frequency and activity of regulatory T cells (Tregs), shifts the systemic cytokine balance, and promotes extravasation of immune cells that together shape the effects of this treatment. In this review, we summarize the seminal work and most recent literature of the therapeutic mechanisms and reflect on future avenues of improvements and applications of ECP.