The study was aimed at investigating the antimelanogenic and antioxidant properties of essential oil when extracted from the leaves of Artemisia argyi, then analyzing the chemical composition of the essential oil. The inhibitory effect of the essential oil on melanogenesis was evaluated by a mushroom tyrosinase activity assay and B16F10 melanoma cell model. The antioxidant capacity of the essential oil was assayed by spectrophotometric analysis, and the volatile chemical composition of the essential oil was analyzed with gas chromatography-mass spectrometry (GC/MS). The results revealed that the essential oil significantly inhibits mushroom tyrosinase activity (IC50 = 19.16 mg/mL), down-regulates B16F10 intracellular tyrosinase activity and decreases the amount of melanin content in a dose-dependent pattern. Furthermore, the essential oil significantly scavenged 2,2-diphenyl-1-picryl-hydrazyl (DPPH) and 2,2'-azino-bis (3-ethylbenzthiazoline-6-sulphonic acid) ABTS radicals, showed an apparent reduction power as compared with metal-ion chelating activities. The chemicals constituents in the essential oil are ether (23.66%), alcohols (16.72%), sesquiterpenes (15.21%), esters (11.78%), monoterpenes (11.63%), ketones (6.09%), aromatic compounds (5.01%), and account for a 90.10% analysis of its chemical composition. It is predicted that eucalyptol and the other constituents, except for alcohols, in the essential oil may contribute to its antioxidant activities. The results indicated that essential oil extracted from A. argyi leaves decreased melanin production in B16F10 cells and showed potent antioxidant activity. The essential oil can thereby be applied as an inhibitor of melanogenesis and could also act as a natural antioxidant in skin care products.