Background: Paper mulberry is one of the most common skin-lightening agents in the beauty industry due to its strong anti-tyrosinase activity. This narrative review aims to summarize the chemical composition, biological activities, and applications of paper mulberry in cosmetics. Method: The literature for this article was acquired from the PubMed, Web of Science, and Google Scholar databases before September 2022. The keywords for searching included “paper mulberry”, “Broussonetia papyrifera”, “skin-lightening”, “skin-whitening”, “depigmentation”, “pharmacological activity”, and “biological activity”. Results: Paper mulberry consists of various components, including flavonoids, tannins, alkaloids, phenols, saponins, coumarins, glycosides, and polysaccharides, which possess a wide range of pharmacological properties. Apart from its anti-tyrosinase activity, paper mulberry and its compounds exhibited anti-inflammatory, antioxidant, antimicrobial, antiviral, anticancer, antidiabetic, anticholinesterase, antigout, antinociceptive, and hepatoprotective effects. Phenols and flavonoids were demonstrated to be the main contributors to the biological activities of paper mulberry. Paper mulberry is widely applied in cosmetics for skin lightening and skin moisturizing purposes and shows potential for application in hair care products due to the hair nourishing effects. The safety of paper mulberry for topical application was proven in clinical studies. Conclusion: The current review provides a better understanding of paper mulberry’s properties and allows us to extend the application of this plant and its bioactive components in cosmetics.