Background: Melasma is a common chronic acquired hyper pigmentary disorder of skin, particularly among Asian and Hispanics. Females are more affected than men. It has a significant impact on appearance, causing psychosocial and emotional distress and reducing the quality of life of the affected individual. Tranexamic acid (TA) can be used to treat melasma. Objectives: To compare the efficacy of oral Tranexamic acid and Hydroquinone (HQ) plus sunscreen in the treatment of melasma. Methods: It was prospective, interventional clinical trial conducted among 150 Bangladeshi melasma patients visiting the Dermatology and Venereology OPD of DMCH between January 2016 and June 2017. Patients were divided randomly into two groups, 75 in each, by lottery method. First group (Group A) was treated with 4% Hydroquinone plus sunscreen (regular) daily for 12 weeks and second group (Group B) was treated with Tranexamic acid 250mg twice a day for 12 weeks. Response was evaluated on the basis of Melasma Area and Severity Index (MASI) and Melasma Quality of Life (MELASQoL) Questionnaire. The mean scores of both variables were compared between both groups. Results: Epidermal melasma was comparatively quicker and better responded to the treatment than dermal or mixed variants. The mean MASI and mean MELASQoL scores between both groups were not significantly different at 4 weeks (p>0.05) but was significantly effective in Group B at 8 and 12 weeks (p<0.05). The mean MASI scores of Group A (HQ & sunscreen) were 11.43±1.82, 9.98±1.99 and 8.94±2.16 at 4, 8 and 12 weeks respectively. The mean MASI scores of Group B (TA) were 11.34±1.92, 9.30+2.07 and 7.19±2.16 at 4, 8 and 12 weeks respectively. Similarly, the mean MELASQoL scores of Group A (HQ & sunscreen) were 34.95±6.61, 29.40±6.60 and 25.87±7.19 at 4, 8 and 12 weeks respectively. The mean MELASQoL scores of Group B (TA) were 33.12±6.40, 26.19±6.43 and 20.63±6.70 at 4, 8 and 12 weeks respectively. Conclusion: Oral Tranexamic acid is more ..