Photodynamic therapy (PDT) is a new modality of skin cancer treatment. It involves the administration of photosensitizing drugs which, when localized in tumor tissue can produce its destruction by absorbing an adequate dose of light of an appropriate wavelength. A large number of photosensitizing agents have been tested in PDT experiments. Topical application of 5-aminolevulinic acid (5-ALA) followed by light irradiation is the most commonly used method. 5-ALA is a prodrug converted in situ via the heme cycle into protoporphyrin IX, an effective photosensitizer agent. Treatment of nonmelanoma skin cancers by PDT has met with varying degrees of success. In the case of 5-ALA, this therapy's main limitation is the poor penetration of 5-ALA into skin, due to hydrophilic and charge characteristics. However, the efficacy of 5-ALA-PDT may be improved by (a) development of adequate drug delivery systems; (b) use of enhancers of PpIX production and accumulation in target tissue, and (c) modifications of the 5-ALA molecule. Optimal timing, light sources, doses, and number of applications are also important factors for topical 5-ALA therapy and must be well defined. The aim of this review is to highlight recent progress in 5-ALA-PDT of skin cancer, and to present ways holding promise for its improvement.