The goal of this study was to assess the ability of squaraine-rotaxanes to generate singlet oxygen for potential application in photodynamic therapy (PDT). Specifically, we compare the aggregation and photophysical properties of an iodinated squaraine dye and an iodinated squaraine-rotaxane. Even under strongly aggregating conditions, the absorption spectra of both remain relatively sharp. An X-ray crystal structure of the iodinated squaraine dye shows that it adopts perpendicular, end-to-face orientations in the solid state. Singlet oxygen generation efficiency was measured by trapping with 1,3-diphenylisobenzofuran. The triplet state of the rotaxane was characterized using laser flash photolysis. The results of this study suggest that heavily halogenated squaraine-rotaxanes have potential as singlet oxygen photosensitizers for PDT..