Natural flour is usually not used directly in compact powder since there are some drawbacks, such as roughness and poor skin adhesion. The purpose of this research was to investigate the extraction and modification of jasmine rice flour using polyethylene glycol (PEG)-50 shea butter. The physical properties in terms of flowability and water resistance of the modified rice flour were investigated and compared with talcum. The modified rice flour was used as the ingredient to develop the compact powder by replacing talcum, which is the main ingredient in compact powder that provides the slipperiness and spread properties, but it is quite harmful. The results of this research revealed that the physical properties of the modified powder changed in terms of flowability and water-resistance by PEG-50 shea butter. The modified rice flour provided better physical properties compared to non-modified rice powder. The modified rice powder, a safe ingredient, could replace 100% talcum in the developed compact powder. Furthermore, the developed compact powder provided Sun Protection Factor (SPF) greater than 15, or 93%, UVB protection, good coverage with a natural appearance, smoothness, diffusion, softness of the skin, and a higher satisfaction level compared with the commercial product.