7,3',4'-Trihydroxyisoflavone (734THIF) is a secondary metabolite of daidzein and has been recently found to possess antioxidant, melanin inhibition, and skin cancer chemopreventive activities. However, the poor water solubility of 734THIF impedes its absorption and skin penetration and, therefore, limits its pharmacological effects when applied topically to the skin. We seek to use the nanoprecipitation method to prepare optimal eudragit E100 (EE)-polyvinyl alcohol (PVA)-loaded 734THIF nanoparticles (734N) to improve its physicochemical properties and thereby increase its water solubility, skin penetration, and biological activities. EE-PVA-loaded 734THIF nanoparticles (734N) were prepared, and their morphology and particle size were evaluated using a particle size analyzer and by electron microscopy. The drug loading and encapsulation efficiencies and in vitro solubility were determined using high-performance liquid chromatography. Hydrogen-bond formation was evaluated by (1)H-nuclear magnetic resonance and Fourier transform infrared spectroscopy, and crystalline-to-amorphous transformation was determined by differential scanning calorimetry and X-ray diffractometry. In vitro skin penetration was analyzed using fresh pig skin mounted on Franz diffusion cells, and cytotoxicity against human keratinocyte HaCaT cells was evaluated using the MTT assay. Antioxidant activity was determined by 2,2-diphenyl-1-picrylhydrazyl-free radical scavenging ability. EE-PVA-loaded 734THIF nanoparticles showed good drug loading and encapsulation efficiencies and were characterized by improved physicochemical properties, including reduction in particle size, amorphous transformation, and intermolecular hydrogen-bond formation. This is associated with increased water solubility and enhanced in vitro skin penetration, with no cytotoxicity toward HaCaT cells. In addition, 734THIF nanoparticles retained their antioxidant activity. In conclusion, 734THIF nanoparticles are characterized by improved physicochemical properties, increased water solubility, and enhanced skin penetration, and these may have potential use in the future as a topical delivery formulation for the treatment of skin diseases.