Objective To explore the application value of modified Xiaoyao powder combined with local introduction of tranexamic acid in patients with chloasma of liver depression and qi stagnation. Methods A total of 82 patients with chloasma of liver depression and qi stagnation type who were treated in our hospital from January 2021 to January 2024 were randomly divided into control group (n =41) and observation group (n =41). The control group was treated with local introduction of tranexamic acid, and the observation group was treated with modified Xiaoyao powder combined with local introduction of tranexamic acid. The clinical efficacy, pigmentation and sex hormone level were compared between the two groups. Results The total effective rate of treatment in the observation group was 95.12%, which was higher than 78.05% in the control group (P <0.05). After treatment, the color spot area and skin color score of the two groups decreased, and those in the observation group were lower than the control group (P <0.05). After treatment, the levels of luteinizing hormone, follicle stimulating hormone and estradiol in the two groups decreased, and those in the observation group were lower than those in the control group (P <0.05). Conclusion For chloasma patients with liver depression and qi stagnation, modified Xiaoyao powder combined with local introduction of tranexamic acid can improve the clinical efficacy, promote the relief of facial pigmentation and improve the level of sex hormones, which is worthy of application.