Objective To study the effect of modified Liuwei Dihuang decoction combined with picosecond laser on skin status and oxidative stress indicators in patients with stable melasma. Methods A total of 70 patients with stable melasma admitted to the Dermatology and Plastic Surgery Center of Chongqing University Three Gorges Hospital from January to December 2024 were selected, and they were divided into the control group and the observation group by the random number table method, with 35 patients in each group. The control group was treated with picosecond laser combined with vitamins, and the observation group was treated with picosecond laser combined with modified Liuwei Dihuang decoction. The clinical efficacy, skin status, oxidative stress indicators and adverse reaction rate were compared between the two groups. Results The total effective rate of the observation group (97.14%) was higher than that of the control group (77.14%) (P <0.05). After treatment, the skin elasticity index and skin moisture content of the observation group were higher than those of the control group, and the MASI score was lower than that of the control group (P <0.05). After treatment, the levels of SOD and CAT in the observation group were higher than those in the control group, and the level of MDA was lower than that in the control group (P <0.05). The incidence of adverse reactions in the observation group (2.86%) was lower than that in the control group (20.00%) (P <0.05). Conclusion The application of modified Liuwei Dihuang decoction combined with picosecond laser in patients with stable melasma has a remarkable effect. It can effectively improve the patient's skin status, reduce oxidative stress response, and is conducive to promoting skin lesion recovery. Moreover, the incidence of adverse reactions after treatment is low, and the application safety is high.