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Transition metal dichalcogenides (TMDCs) are a family of two-dimensional layered materials (2DLMs) with extraordinary optical properties. They present an attractive option for future multi-functional and high-performance optoelectronics. However, much remains to be done to realize a mature technology for commercial applications. In this review article, we describe the progress and scope of TMDC devices in optical and photonic applications. Various photoresponse mechanisms observed in such devices and a brief discussion on measurement and analysis methods are described. Three main types of optoelectronic devices, namely photodetectors, photovoltaics and light-emitting devices are discussed in detail with a focus on device architecture and operation. Examples showing experimental integration of 2DLM-based devices with silicon photonics are also discussed briefly. A wide range of data for key performance metrics is analysed with insights into future directions for device design, processing and characterization that can help overcome present gaps and challenges.