This review provides an in-depth analysis of the pathophysiology of melasma and highlights recent studies that elucidate its underlying mechanisms. Given the prevalence of melasma, a thorough understanding of its pathogenesis is critical for the development of effective treatment strategies. We analyzed the current literature to identify findings related to epidermal changes, basement membrane (BM) alterations, and various dermal modifications, including solar elastosis, mast cell activity, and vascular changes. We also examined the influence of visible light (VL) and hormonal fluctuations on melasma. This review intertwines these insights with an overview of contemporary treatment approaches. Our findings indicate advancements in understanding melasma's pathophysiology, highlighting significant changes in the epidermis and BM, along with dermal factors, such as vascular alterations, mast cell involvement, and senescent fibroblasts. We review the established mechanisms in the pathogenesis of melasma while incorporating recent scientific updates. Additionally, a survey of the available treatments targeting these novel mechanisms revealed promising therapeutic modalities currently under investigation. In conclusion, understanding the latest pathophysiological insights is crucial for enhancing clinician awareness and patient reassurance, as well as improving therapeutic strategies. Nevertheless, ongoing research remains essential to elucidate the complexities of melasma further and optimize clinical outcomes.