The recognition of atypical or dysplastic nevomelanocytic nevi potentially provides clinicians with another means of identifying individuals at increased risk for cutaneous malignant melanoma. However, a great deal of controversy still surrounds these lesions, their significance, and the clinical and histologic criteria needed for their diagnosis at present. In general, dysplastic nevi tend to be asymmetrical and larger (greater than 5 mm) than ordinary acquired nevi, have a macular component, irregular and ill-defined borders, and haphazard (variegate) coloration. A clinical diagnosis of dysplastic nevi must be confirmed by histopathology, since not all clinically atypical nevi are dysplastic. While precise histopathologic criteria for dysplastic nevi are lacking, most authorities agree that an abnormal nevomelanocytic proliferative pattern as manifested by increased numbers of basilar melanocytes and/or abnormal junctional nevomelanocytic nesting in the setting of lentiginous epidermal hyperplasia, variable degrees of nevomelanocytic nuclear atypia, and a lymphocytic host response are consistent with a histologic diagnosis of dysplastic nevi. Current data for individuals with dysplastic nevi and a family history of cutaneous malignant melanoma (at least two family members with cutaneous malignant melanoma) indicate a relative risk for cutaneous malignant melanoma about 148 times that of the general population. In comparison, cutaneous malignant melanoma risk seems lower for individuals with familial dysplastic nevi (but without familial cutaneous malignant melanoma) and "sporadic" dysplastic nevi. With respect to progression to melanoma, probably the vast majority of dysplastic nevi remain stable or possibly regress. Management of individuals with histologically confirmed dysplastic nevi involves periodic skin examinations. Regional overview and life-size photography are helpful in following these patients. Patients should also be instructed in the examination of their own skin. While a definite relationship between sun exposure and dysplastic nevi remains unproved, the use of sunscreens and avoidance of unnecessary sun exposure are advised. Examination of family members for atypical melanocytic lesions is also recommended.