The present invention relates to topical skin whitening compositions comprising a whitening effective amount of a black yeast-derived melanin-degrading enzyme extract and a method of preparing the compositions. The compositions provide a whitening effect by degrading melanin on the surface of the skin, the hair and the nails. The enzyme extract can be derived from Exophiala mansonii. The compositions containing the enzyme extract are more effective than are similar compositions containing kojic acid in producing a whitening effect on the skin.