To provide a state-of-the-art summary of currently available data about the genetics of cutaneous melanoma and nevi, we reviewed the pertinent literature and outlined the important findings on genetic analyses. Although the first English-language report of melanoma in 1820 contained a description of a melanoma-prone family, seminal studies by investigators at the National Cancer Institute and the University of Pennsylvania identified dysplastic nevi (DN) as an important melanoma precursor, suggested an autosomal dominant mode of inheritance for both melanoma and DN, and proposed that a melanoma-susceptibility gene (CMM1) was located on chromosome 1p36. This gene assignment has not yet been confirmed by independent investigators. A second melanoma gene, designated CMM2, has been mapped to chromosome 9p21. This gene assignment has been confirmed independently, and the cell cycle regulator p16INK4a has been proposed as a candidate gene; germline mutations in this gene have been identified in about half of melanoma-prone families. Germline mutations in the cyclin-dependent kinase gene CDK4 (chromosome 12q14) have recently been described in two melanoma kindreds; this finding likely represents a third melanoma gene. A heritable determinant for total nevus number has been suggested, as has the presence of a major gene responsible for total nevus density in melanoma-prone families. An autosomal dominant mode of inheritance for DN has been proposed, and evidence suggests that DN may be a pleiotropic manifestation of the 1p36 familial melanoma gene. Several studies have shown a surprisingly high prevalence of DN on the skin of family members of probands with DN. In light of the extensive evidence documenting that persons with DN (both sporadic and familial) have an increased prospective risk for melanoma, these family studies suggest that relatives of persons with DN should be examined for DN and for melanoma. Overall, genetic determinants have a major role in the pathogenesis of normal nevi, DN, and melanoma. Elucidating the molecular basis of these genetic events promises to enhance melanoma risk reduction strategies and thereby reduce melanoma-associated mortality.