Objective To investigate the therapeutic effect of self-formulated Beauty Spot-Removing Decoction on female patients with liver qi stagnation-type melasma. Methods According to the random number table method, 64 female patients with liver qi stagnation-type melasma admitted to our hospital from May 2024 to May 2025 were divided into a control group (32 cases, treated with tranexamic acid tablets) and a study group (32 cases, treated with self-formulated Beauty Spot-Removing Decoction based on the control group), and the therapeutic effects of the two groups were compared. Results The total effective rate of the study group was higher than that of the control group (P<0.05). Compared before treatment and after 3 months of treatment, the scores of chest and hypochondrium distension, irritability in Traditional Chinese Medicine (TCM) syndrome, melasma area, and severity (MASI) in both groups decreased, and the study group was lower than that of the control group (P<0.05). Conclusion After receiving self-formulated Beauty Spot-Removing Decoction, the therapeutic effect of female patients with liver qi stagnation-type melasma was significantly improved, and the TCM syndrome and melasma severity were markedly alleviated, which has clinical reference value.