Chinese herbs have been and still are widely used as important remedies in Oriental medicine. Over the recent years, a variety of biologically active constituents have been isolated from these sources and confirmed to have multifunctional activity in experimental studies. Honokiol is a small-molecule polyphenol isolated from the genus Magnolia. It is accompanied by other related polyphenols, including magnolol, with which it shares certain biological properties. Recently, honokiol and magnolol have been found to have anti-oxidative, anti-inflammatory, anti-tumor, and anti-microbial properties in preclinical models, without appreciable toxicity. These findings have increased interest in bringing honokiol and magnolol to the clinic as novel therapeutic agents in dermatology. In this review, the findings concerning the major mechanisms of action of honokiol and magnolol are described. Knowledge of the multiple activities of honokiol and magnolol can assist with the development of honokiol and magnolol derivatives and the design of clinical trials that will maximize the potential benefit of honokiol and magnolol in the patient setting for dermatologic disorders.