AbstractGinsenosides are compounds responsible for the primary pharmacological effects of American ginseng. Compound‐Y (C‐Y) is a minor ginsenoside and a metabolite of Panax ginseng. In this study, we investigated the protective effect of ginsenoside UVB‐irradiated NHDFs and its potential for use as an antihyperpigmentation agent through ginsenoside C‐Y as a functional food and cosmetic ingredient. Ginsenoside C‐Y is a natural antioxidant isolated from the American ginseng PDD‐ginsenoside. Our data showed that ginsenoside C‐Y block UVB‐exposed ROS, restrict MMP‐1 production and promote procollagen type I synthesis. Interestingly, ginsenoside C‐Y suppresses UVB‐exposed VEGF, and TNF‐α secretion, could be related with NFAT signal path. Ginsenoside C‐Y has exhibited photoaging effects by increasing TGF‐β1 level, fortifying Nrf2 nuclear translocation and restricting AP‐1 and MAPK phosphorylation. Assessment of the melanogenic response indicated that ginsenoside C‐Y inhibited melanin secretion and tyrosinase activity and decreased melanin content in Melan‐a and zebrafish embryos. These results suggest that ginsenoside C‐Y can be used as a potential botanical agent to protect premature skin from UVB‐induced photodamage and prevent skin hyperpigmentation.