Photoluminescence-based phototherapy is an innovative and minimally invasive approach to treat various medical conditions such as cancer and bacterial infections. The technology allows for precise targeting of affected tissues by exploiting the controlled absorption and emission properties of luminescent materials such as quantum dots and upconversion nanoparticles. Recent advances in luminescent materials have improved therapeutic outcomes through mechanisms such as Förster resonance energy transfer (FRET) and reactive oxygen species (ROS) generation, enabling applications in antibacterial therapy, immune system activation, and cancer treatment. However, challenges remain regarding materials biocompatibility, tissue penetration, and clinical scalability. This report provides a comprehensive overview of the mechanisms, applications, and future directions of luminescence therapy, focusing on its transformative potential in modern medicine.