Recent advances in mouse genetics have identified molecular changes that are critical for melanocyte maturation and differentiation. This review briefly summarizes the current knowledge of distinct steps in melanocyte development, and identifies for each step the most important molecules such as the growth factors stem cell factor and endothelin-3, with their respective receptors. Classical cadherins, i.e. E-cadherin, N-cadherin and P-cadherin, determine melanocyte positioning in the skin. During naevus and melanoma development, the two growth factor signalling pathways are downregulated, whereas cadherin expression shifts concomitantly with re-positioning of the naevus and melanoma cells in the skin. Loss of E-cadherin and gain of N-cadherin by melanoma cells has profound consequences for the regulatory cross-talk between various types of cells in the skin. Naevus and melanoma cells that do not express E-cadherin are resistant to control by keratinocytes and establish close communications with fibroblasts and endothelial cells. However, forced expression of E-cadherin in melanoma cells can reverse the malignant phenotype by re-establishing the control of keratinocytes over the melanoma cells. Even highly aggressive metastatic melanoma cells can be signalled to turn off the expression of genes associated with tumour invasion and metastasis, suggesting that this strategy could be utilized in the therapy of melanoma.