The melanocortin (MC) system is probably the best characterized neuropeptide network of the skin. Most cutaneous cell types express MC receptors (MC-Rs) and synthesize MCs, such as alpha-melanocyte-stimulating hormone (alpha-MSH), that act in autocrine and paracrine fashion. In human skin cells, activation of adenylate cyclase by MCs occurs at 10(-6)-10(-9) M doses of the ligand, but effects are induced in some cell types at subnanomolar concentrations. In addition to the pigmentary action of MCs on epidermal melanocytes, the hair follicle is a source and target for MCs. MCs regulate lipogenesis in sebocytes expressing both MC-1R and MC-5R. In adipocytes, lipid metabolism is modulated by agouti signalling protein, a natural MC-1R/MC-4R antagonist. The anti-inflammatory activity of alpha-MSH includes immunomodulatory effects on several resident skin cells and antifibrogenic effects mediated via MC-1R expressed by dermal fibroblasts. In human mast cells, alpha-MSH appears to be proinflammatory due to histamine release. alpha-MSH exhibits cytoprotective activity against UVB-induced apoptosis and DNA damage, a finding that helps explain the increased risk of cutaneous melanoma in individuals with loss of function MC-1R mutations. These findings should improve our understanding of skin physiology and pathophysiology and may offer novel strategies with MCs as future therapeutics for skin diseases.