Dysplastic nevi are melanocytic tumors that occupy intermediate positions in the spectrum of melanocytic proliferations. Although they are invariably cured if completely excised, their biologic potential if left untreated is unknown. We examined a series of such lesions with HMB-45, a melanocyte-specific antibody, in order to explore protein expression within these borderline lesions. HMB-45 has previously been shown to label intraepidermal melanocytes within melanomas and within all nevi. Intradermal melanoma cells also label with HMB-45, but dermal nevus cells within common melanocytic nevi do not normally stain. In contrast, we found mild to moderate staining of nevus cells within the papillary dermis of dysplastic nevi and within residual nevus cells adjacent to malignant melanomas. In the same lesions, we demonstrated strong staining of intraepidermal melanocytes. Thus, dermal nevus cells within dysplastic nevi and within residual nevus cells adjacent to malignant melanomas are expressing low-level amounts of a protein expressed by melanoma cells, but not by dermal nevus cells within wholly benign melanocytic tumors. This lends support to the concept of these lesions as precursor lesions with undetermined biologic potential.