Melasma is a common acquired pigmentary disorder marked by irregular hyperpigmented macules or patches and most commonly occurs in women of darker skin color. It is a chronic often-relapsing condition that causes negative psychosocial effects in those affected. Current treatments such as hydroquinone, kojic acid, and retinoids, among others, demonstrate variable efficacy and side-effect profiles. We conducted a comprehensive literature review examining the use of tranexamic acid (TA), a well-known anti-fibrinolytic agent, in the treatment of melasma. TA delivered orally, topically, and through physical methods works via the inhibition of ultraviolet (UV)-induced plasmin activity in keratinocytes. Predefined search terms were entered into PubMed. Articles were then independently screened by two authors to include only those written in the English language and relating to human subjects with at least mild melasma. The search identified 28 articles, 15 of which met the criteria for full review. The review revealed that TA treatment for melasma is equally effective or more effective than other standard therapies and may induce fewer side effects. Our comprehensive review suggests that TA may be a promising treatment option for melasma because of its demonstrated effectiveness alone and in combination with other modalities as well as its limited side-effect profile.