In melanoma, as well as in other solid tumors, the cells within a given tumor exhibit strong morphological, functional and molecular heterogeneity that might reflect the existence of different cancer cell populations, among which are melanoma-initiating cells (MICs) with 'stemness' properties and their differentiated, fast-growing progeny. The existence of a slow-growing population might explain the resistance of melanoma to classical chemotherapies that target fast growing cells. Therefore, elucidating the biologic properties of MICs and, more importantly, the molecular mechanisms that drive the transition between MICs and their proliferating progeny needs to be addressed to develop an efficient melanoma therapy. Using B16 mouse melanoma cells and syngeneic mice, we show that the inhibition of microphthalmia-associated transcription factor (Mitf), the master regulator of melanocyte differentiation, increases the tumorigenic potential of melanoma cells and upregulates the stem cell markers Oct4 and Nanog. Notably, p27, the CDK inhibitor, is increased in Mitf-depleted cells and is required for exacerbation of the tumorigenic properties of melanoma cells. Further, a slow-growing population with low-Mitf level and high tumorigenic potential exists spontaneously in melanoma. Ablation of this population dramatically decreases tumor formation. Importantly, these data were confirmed using human melanoma cell lines and freshly isolated human melanoma cell from lymph node and skin melanoma metastasis. Taken together our data, identified Mitf and p27 as the key molecular switches that control the transition between MICs and their differentiated progeny. Eradication of low-Mitf cells might be an appealing strategy to cure melanoma.