Non-melanoma skin cancer (NMSC) is by far the most frequently diagnosed cancer in Australia, and exposure to ultraviolet (UV) radiation is the primary cause. Both UVB and UVA radiation have been shown to cause DNA damage and immunosuppression, the important forms of biological damage that lead to NMSC. The DNA of keratinocytes absorbs UV radiation and produces photolesions such as cyclobutane pyrimidine dimers (CPDs). UV absorption by other chromophores results in the production of reactive oxygen species which cause oxidative damage to DNA such as 8-oxo-7,8-dihydroguanine (8oxoG). These photolesions can then, if not correctly repaired, lead to signature mutations. Reactive oxygen species also cause receptor activation and damage lipids and proteins. UV also deprives cells of adenosine triphosphate, and causes inflammation and cell cycle dysregulation. UV radiation has been shown to exert potent immunosuppressive effects on the skin through a number of molecular and cellular mechanisms. Many tumour suppressor genes and oncogenes have been studied and implicated in photocarcinogenesis, particularly p53, PTCH1, BRM and RAS. Clinical observations, histological analysis, as well as molecular and cytogenetic studies have shown actinic keratoses (AKs) and Bowen's disease (BD) to be precursors of squamous cell carcinomas (SCCs). Keratoacanthomas (KAs), a type of SCC, and AKs have frequently been observed to regress. Sun protective measures and sunscreens can reduce the incidence of NMSCs, although their effectiveness is limited by non-compliance. A large number of chemopreventive agents have been investigated, but to date none has been found to be clinically useful except within selected high risk groups. Therefore, further research is urgently required to find an ideal chemopreventive agent that is effective, safe, accessible and convenient.