When citing a photograph, you italicize the title. You should include the following information in this order: name of photographer, title of photograph, date of composition, name of institute that houses the work, and then the name of the city where the institute is located.
Example: Riddle, Tom. Magic Donut. 2004. Museum of Magical History. London.
You can also use this same format for citing paintings and sculptures.
If your image comes from an online source, then the format changes a little: Name of artist, title of work, medium of work, and then include the information for the website and the date accessed.
Example: Riddle, Tom. Magic Donut. Photograph. Photobuzz. Digimedia, 2004. Web. 13 Jan. 2013.
The above answer gives a good start, but with the greater accessibility of photos everywhere, it is important to know how to cite photos from different contexts. There is no one size fits all. So, based on context, you will have to make decisions. I will give you three possibilities and I will link one website for greater information.
According to the MLA format, there are three main ways to cite a photo.
First, if you find a photo in a museum, you should follow this format.
Last, First. Photograph Title. Year Created. Photograph. Museum/Institution, Location.
Second, if you use a photo in book, which is more likely, then you use a slightly different format...
Last, First M. Photograph Title. Year Created. Photograph. Museum/Institution, Location. Book Title. City: Publisher, Year Published. Page(s).
Third, if you use a photo from a website, then there is another format.
Last, First M. Photograph Title. Year Created. Photograph. Museum/Institution, Location. Website Title. Web. Date Month Year Accessed.