This paper presents an extensive analysis of the operating principles, theoretical background, advantages and limitations of laser-based lighting systems. In the first part of the paper we discuss the main advantages and issues of laser-based lighting, and present a comparison with conventional LED-lighting technology. In the second part of the paper, we present original experimental data on the stability and reliability of phosphor layers for laser lighting, based on high light-intensity and high-temperature degradation tests. In the third part of the paper (for the first time) we present a detailed comparison between three different solutions for laser lighting, based on (i) transmissive phosphor layers; (ii) a reflective/angled phosphor layer; and (iii) a parabolic reflector, by discussing the advantages and drawbacks of each approach. The results presented within this paper can be used as a guideline for the development of advanced lighting systems based on laser diodes.