Honokiol is one of the natural extracts of Magnolia officinalis. It is a small molecule, lipophilic compound with extensive biological effects. It has been used in the treatment of multisystem diseases, including digestive diseases, endocrine diseases, nervous system diseases, and various tumors. This paper reviews the biological effects of honokiol on the treatment of skin diseases in recent years, including anti-microbial, anti-oxidant, anti-inflammatory, anti-tumor, anti-fibrosis, anti-allergy, photo-protection, and immunomodulation. Most current researches are focused on the effects of anti-melanoma and photo-protection. Therefore, we summarized the specific mechanisms about these two effects. On the other side of treating skin diseases, the advantages of topical drugs cannot be replaced. As a small molecule fat-soluble compound, honokiol is suitable for external use. We reviewed the advantages and disadvantages of the topical mixed cream and various improved methods. These improvements include physical and chemical penetration enhancers, drug carriers, and chemical derivatives. In conclusion, honokiol has a wide range of effects, and its topical preparation provides a safe and effective way for treating skin diseases.© 2022 The Authors. Dermatologic Therapy published by Wiley Periodicals LLC.