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Whitening cosmetics with anti-melanogenesis activity are very popular worldwide. Many companies have tried to identify novel ingredients that show anti-melanogenesis effects for new product development. Among many plant-derived compounds, polyphenols are thought to be one of the most promising anti-melanogenesis ingredients. In order to prepare effective whitening polyphenols, 3,3,4,5,7-pentahydrosyflavone (quercetin) has been widely researched and applied to commercial products because it is present in high levels in many edible plants. Quercetin is thus a representative polyphenol and has recently gained attention in the cosmetics field. There are many controversies, however, regarding the effect of quercetin, based on in vitro studies, cell line experiments, and human trials. In this review, toxicity and efficacy data for quercetin and its derivatives in various experimental conditions (i.e., various cell lines, concentration ranges, and other parameters) were examined. Based on this analysis, quercetin itself is shown to be ineffective for hypopigmentation of human skin. However, a few types of quercetin derivatives (such as glycosides) show some activity in a concentration-dependent manner. This review provides clarity in the debate regarding the effects of quercetin.