Vitamin B3 (nicotinic acid, niacin) deficiency causes the systemic disease pellagra, which leads to dermatitis, diarrhea, dementia, and possibly death depending on its severity and duration. Vitamin B3 is used in the synthesis of the NAD+ family of coenzymes, contributing to cellular energy metabolism and defense systems. Although nicotinamide (niacinamide) is primarily used as a nutritional supplement for vitamin B3, its pharmaceutical and cosmeceutical uses have been extensively explored. In this review, we discuss the biological activities and cosmeceutical properties of nicotinamide in consideration of its metabolic pathways. Supplementation of nicotinamide restores cellular NAD+ pool and mitochondrial energetics, attenuates oxidative stress and inflammatory response, enhances extracellular matrix and skin barrier, and inhibits the pigmentation process in the skin. Topical treatment of nicotinamide, alone or in combination with other active ingredients, reduces the progression of skin aging and hyperpigmentation in clinical trials. Topically applied nicotinamide is well tolerated by the skin. Currently, there is no convincing evidence that nicotinamide has specific molecular targets for controlling skin aging and pigmentation. This substance is presumed to contribute to maintaining skin homeostasis by regulating the redox status of cells along with various metabolites produced from it. Thus, it is suggested that nicotinamide will be useful as a cosmeceutical ingredient to attenuate skin aging and hyperpigmentation, especially in the elderly or patients with reduced NAD+ pool in the skin due to internal or external stressors.