Peritoneal carcinomatosis occurs frequently in patients with advanced stage gastrointestinal and gynecological cancers. The wide-spread peritoneal micrometastases indicate a poor outlook, as the tumors are difficult to diagnose and challenging to completely eradicate with cytoreductive surgery and chemotherapeutics. Photodynamic diagnosis (PDD) and therapy (PDT), modalities that use photosensitizers for fluorescence detection or photochemical treatment of cancer, are promising theranostic approaches for peritoneal carcinomatosis. This review discusses the leading clinical trials, identifies the major challenges, and presents potential solutions to advance the use of PDD and PDT for the treatment of peritoneal carcinomatosis. While PDD for fluorescence-guided surgery is practically feasible and has achieved clinical success, large randomized trials are required to better evaluate the survival benefits. Although PDT is feasible and combines well with clinically used chemotherapeutics, poor tumor specificity has been associated with severe morbidity. The major challenges for both modalities are to increase the tumor specificity of the photosensitizers, to efficiently treat peritoneal microtumors regardless of their phenotypes, and to improve the ability of the excitation light to reach the cancer tissues. Substantial progress has been achieved in (1) the development of targeted photosensitizers and nanocarriers to improve tumor selectivity, (2) the design of biomodulation strategies to reduce treatment heterogeneity, and (3) the development of novel light application strategies. The use of X-ray-activated PDT during whole abdomen radiotherapy may also be considered to overcome the limited tissue penetration of light. Integrated approaches that take advantage of PDD, cytoreductive surgery, chemotherapies, PDT, and potentially radiotherapy, are likely to achieve the most effective improvement in the management of peritoneal carcinomatosis.