Common organic molecules usually suffer from aggregation caused quenching (ACQ), which is disadvantageous for imaging guided phototherapy. It is of tremendous significance for a photosensitizer to be well soluble and simultaneously remain highly fluorescent in aqueous solution. Heavy atom free 1,1,4,4-tetraphenylbuta-1,3-diene (denoted as TPD) with aggregation induced emission (AIE) was designed and synthesized by the Knoevenagel reaction. 1,2-Distearoyl-sn-glycero-3-phospho-ethanolamine-N-[methoxy(polyethyleneglycol)-2000] (DSPE-PEG-2000) coated TPD nanoparticles (NPs) show high singlet oxygen generation ability with singlet oxygen sensor green (SOSG) as a probe and still remain highly fluorescent in aqueous solution. In vitro cytotoxicity assay demonstrates that these NPs have a half-maximal inhibitory concentration (IC50) as low as 8.2 μg mL−1. Meanwhile, in vivo fluorescence imaging shows that these NPs can passively target the tumor by the enhanced penetration and retention (EPR) effect within 6 h. Furthermore, in vivo phototherapy suggests that TPD NPs are able to inhibit the growth of a tumor after irradiation without side effects on the normal tissues, including heart, liver, spleen, lungs and kidneys, indicating the low dark toxicity, high phototoxicity and excellent bio-compatibility of such NPs. [ABSTRACT FROM AUTHOR]