Objective To analyze the effect of modified Qibai powder combined with compound Muniziqi granules in the treatment of patients with melasma. Methods A total of 80 patients with melasma admitted to the Department of Dermatology, Nanjing Lishui District Hospital of Traditional Chinese Medicine from January 2024 to January 2025 were selected as the research subjects. According to the random number table method, they were divided into the control group and the observation group, with 40 patients in each group. The control group was treated with compound Muniziqi granules combined with hydroquinone cream, and the observation group was treated with modified Qibai powder combined with compound Muniziqi granules. The lesion area and color score, adverse reaction rate and melanin index were compared between the two groups. Results The lesion area and color scores of the observation group after treatment were lower than those of the control group (P <0.05). The incidence of adverse reactions in the observation group (5.00%) was lower than that in the control group (20.00%) (P <0.05). The melanin index of the observation group after treatment was lower than that of the control group (P <0.05). Conclusion The application of modified Qibai powder combined with compound Muniziqi granules in patients with melasma has a definite effect, which can effectively reduce the lesion area, improve skin color, help to reduce the incidence of adverse reactions, and decrease skin melanin content.