Magnolia raw materials have long been used in Chinese folk medicine. The biologically active chemical compounds in Magnolia, mainly lignans, e.g., honokiol, exert health-enhancing effects in certain diseases, including skin conditions. Since the scientific literature does not provide a comparative analysis of the therapeutic properties of honokiol on the skin in various biological models, an attempt was made to supplement the knowledge in this field. This review presents the antimicrobial, anti-inflammatory, and photoprotective properties of honokiol used in dermatological problems and its anticancer activity in melanoma and non-melanoma skin cancers. Honokiol reduces the expression of HSV-1 genes, inhibits DNA replication, lowers the level of proteins, regulates the colonisation of viral glycoproteins with high membrane selectivity, and inhibits the endocytosis process. It has antibacterial activity, as it destroys bacterial cell walls and membranes. It disrupts vacuolar functioning and intracellular calcium homeostasis in dermatophyte cells and inhibits fungal growth by delaying germination, altering membrane permeability, and reducing hyphal growth. It reduces inflammatory cytokines and stimulates anti-inflammatory cytokine IL-10. Honokiol prevents UV-B induced skin cancer through targeting cell cycle regulators, inflammatory mediators, and cell survival signals. It induces apoptosis via extrinsic and intrinsic pathways, activating proapoptotic proteins. It acts as an inhibitor of the oncogenic protein KRT18 in melanoma and prevents the progression of highly metastatic melanoma. Future research should explore the signalling pathways and molecular mechanisms of honokiol action and its synergistic effects at the cellular level and help to develop methods for delivering honokiol to the organism by nanocarriers to improve selective therapies in some diseases.