Pagetoid melanocytosis refers to the presence of solitary and small groups of melanocytes in the superficial layers of the epidermis. Although it is generally considered to be a diagnostic hallmark of melanoma, it may also be seen in certain melanocytic naevi. Attempts to formulate reliable histological criteria for distinction between benign and malignant pagetoid melanocytosis have been only partly successful. Extensive and diffuse pagetoid spread of melanocytes, especially when it extends laterally beyond the underlying junctional component, combined with marked cytological atypia, favours melanoma (Fig. 1). In naevi, pagetoid spread tends to be more limited and there is no marked cytological atypia. Since these criteria are applicable in only a subset of cases, the correct diagnosis of melanocytic lesions must be based not only on the features of pagetoid melanocytosis but also on all histological and clinical findings. The pathogenesis of pagetoid melanocytosis is, at best, hypothetical and presumes an active infiltrative process in the setting of malignancy. However, novel data support the contention of a passive drift of melanocytes carried upwards by proliferating keratinocytes under particular circumstances, such as trauma or UV exposure. In this review, we evaluate the histological features of pagetoid melanocytosis in the light of current experimental data, reflecting on the pathogenesis of this intriguing phenomenon.