Kojic acid (KA) has emerged as a prominent tyrosinase inhibitor with considerable potential in cosmetic applications; however, its susceptibility to instability during storage poses a challenge to its widespread use. This review explores the advancements in addressing this limitation through the development of various KA derivatives, focusing on the modification of the C-7 hydroxyl group. Strategies such as esterification, hydroxy-phenyl ether formation, glycosylation, and incorporation into amino acid or tripeptide derivatives have been employed to enhance stability and efficacy. Among these derivatives, Kojic Acid Dipalmitate (KDP), a palmitic ester derivative of KA, stands out for its notable improvements in stability, permeability, and low toxicity. Recent developments indicate a growing utilization of KDP in cosmetic formulations, with over 132 available products on the market, encompassing various formulations. Formulations based on nanotechnology, which incorporate KDP, have been provided, including nanosomes, nanocreams, multiple emulsions, liposomes, solid lipid nanoparticles (SLNs), ethosomes, and nanoemulsions. Additionally, three patents and seven advanced system deliveries of KDP further underscore its significance. Despite its increasing prevalence, the literature on KDP remains limited. This review aims to bridge this gap by providing insights into the synthesis process, physicochemical properties, pharmaceutical preparation, diverse applications of KDP in cosmetic products, and recent nanotechnology formulations of KDP. This review paper seeks to explore the recent developments in the use of KDP in cosmetics. The goal is to enhance stability, permeability, and reduce the toxicity of KA, with the intention of promoting future research in this promising sector.