Photoacoustic imaging is a non-destructive method to obtain information about the distribution of optically absorbing structures inside a semitransparent medium. It is based on thermoelastic generation of ultrasonic waves by the absorption of a short laser pulse inside the sample. From the ultrasonic waves measured outside the object, the interior distribution of absorbed energy is reconstructed. The ultrasonic waves, which transport information from the interior to the surface of the sample, are scattered or absorbed to a certain extent by dissipative processes. The scope of this work is to quantify the information loss which is equal to the entropy production during these dissipative processes and thereby to give a principle limit for the spatial resolution which can be gained in photoacoustic imaging. This theoretical limit is compared to experimental data. In this book chapter stateof-the-art methods for modeling ultrasonic wave propagation in the case of attenuating media are described. From these models strategies for compensating ultrasound attenuation are derived which may be combined with well-known reconstruction algorithms from the non-attenuating case for photoacoustic imaging. Section 2 gives a short description of photoacoustic imaging, especially photoacoustic tomography, and the available image reconstruction algorithms to reconstruct the interior structure from the detected ultrasound signal at the sample surface. Beside small point-like detectors also large detectors, so called integrating detectors are used for photoacoustic tomography. The latter ones require different image reconstruction algorithms. Spatial resolution is an essential issue for any imaging method. Therefore we describe the influencing factors of the resolution in photoacoustic tomography. Section 3 is dedicated to acoustic attenuation. The spatial resolution in photoacoustic imaging is limited by the acoustic bandwidth. To resolve small objects shorter wavelengths with higher frequencies are necessary. For such high frequencies, however, the acoustic attenuation increases. This effect is usually ignored in photoacoustic image reconstruction but as small objects or structures generate high frequency components it limits the minimum detectable size, hence the resolution. Several models for acoustic attenuation, especially used for ultrasound propagation in biological tissue, are compared with experimental data.