Genus Artemisia occurs as a hardy plant and has a wide range of culinary and medicinal features. In this study, we aimed to describe the melanin inhibitory activity of one Artemisia species, i.e., Artemisia capillaris Thunb. Ethanol extracts of fermented Artemisia capillaris (Art.EtOH.FT) and non-fermented Artemisia capillaris (Art.EtOH.CT) were tested for their ability to inhibit tyrosinase activity and melanin pigmentation. Both extracts showed dose-dependent inhibition against α-melanocyte stimulating hormone-stimulated melanin formation and tyrosinase activity, without cytotoxicity. At 100 μg/mL, both extracts showed greater inhibition than kojic acid, the positive control. Protein expressions of microphthalmia-associated transcription factor (MITF), tyrosinase (TYR), tyrosinase-related protein 1 (TRP-1), and tyrosinase-related protein 2 (TRP-2) at the transcriptional level were determined by using real-time and semi-quantitative polymerase chain reaction. To complete the mechanistic study, presences of upstream elements of MITF, the phosphorylated-extracellular signal-regulated kinase (p-ERK), and phosphorylated-mitogen-activated protein kinase kinase (p-MEK) were confirmed by using western blot analysis. Expressions of p-TYR, p-TRP-1 and p-TRP- 2, downstream factors for p-ERK and p-MITF, were translationally inhibited by both extracts. Art.EtOH.FT induced more potent effects than Art.EtOH.CT, especially signal transduction effects. In summary, Artemisia capillaris extracts appear to act as potent hypopigmentation agents.