The histopathologic interpretation of proliferative nodules (PNs) in congenital melanocytic nevi can present significant challenges as some PNs may exhibit atypical features that make the distinction from melanoma difficult. We compared histologic features, Ki-67%, PHH3, and CD117% expression levels by immunohistochemistry in 18 benign and 25 atypical PNs (from 41 patients) with that of background congenital nevi (of these 43 cases), 10 congenital nevi, and 3 dermal melanomas arising in congenital melanocytic lesions. In addition, we evaluated the presence of BRAF, GNAQ, HRAS, KRAS, and NRAS mutations in all groups using the SNaPshot Multiplex System. Follow-up was available on 19 patients (9 benign and 10 atypical PNs) (range, 2 to 20 y; median, 8 y) and all were alive with no evidence of disease. The specific histologic features of atypical PNs, such as sharp demarcation (P<0.001), expansile growth (P<0.001), epidermal effacement (P<0.001), nuclear pleomorphism (P<0.001), and increased mitoses (P<0.001), differed significantly from those of benign PNs. Immunohistochemical results showed that Ki-67% and PHH3 scores, but not CD117% expression, were significantly higher (P<0.05) in atypical PNs. Molecular analyses showed that the PNs and background congenital melanocytic nevi of the giant congenital nevi possess more frequent NRAS mutations and infrequent BRAF mutations when compared with those of the remaining cases. These findings suggest that histologic features and Ki-67 and PHH3 expression levels are the strongest parameters to distinguish between benign versus atypical PNs. The immunohistochemical results suggest that atypical PNs are distinct borderline lesions residing between benign PNs and dermal melanomas. Although numerous mutations are detected in the samples, the diagnostic use of molecular analysis in this regard is limited.