Photodynamic therapy is arising as a noninvasive treatment modality for cancer and other diseases. One of the key factors to determine the therapeutic function is the efficiency of photosensitizers (PSs). Opposed to traditional PSs, which show quenched fluorescence and reduced singlet oxygen production in the aggregate state, PSs with aggregation-induced emission (AIE) exhibit enhanced fluorescence and strong photosensitization ability in nanoparticles. Here, the design principles of AIE PSs and their biomedical applications are discussed in detail, starting with a summary of traditional PSs, followed by a comparison between traditional and AIE PSs to highlight the various design strategies and unique features of the latter. Subsequently, the applications of AIE PSs in photodynamic cancer cell ablation, bacteria killing, and image-guided therapy are discussed using charged AIE PSs, AIE PS molecular probes, and AIE PS nanoparticles as examples. These studies have demonstrated the great potential of AIE PSs as effective theranostic agents to treat tumor or bacterial infection. This review hopefully will spur more research interest in AIE PSs for future translational research.