The present invention provides methods and compositions for photodynamic therapy. The composition comprises ceramic nanoparticles in which a photosensitive drug/dye is entrapped. The ceramic nanoparticles are made by formation of a micellar composition of the dye. The ceramic material is added to the micellar composition and the ceramic nanoparticles are precipitated by alkaline hydrolysis. The precipitated nanoparticles in which the photosensitive dye/drug is entrapped can be isolated by dialysis. The resulting drug doped nanoparticles are spherical, highly monodispersed, and stable in aqueous system. Irradiation with light of suitable wavelength of the photosensitizing drug entrapped inside nanoparticles resulted in generation of singlet oxygen, which was able to diffuse out through the pores of the ceramic matrix. The drug loaded ceramic nanoparticles of the present invention can be used as drug carriers for photodynamic therapy.