Eleven dysplastic melanocytic naevi with various degrees of dysplasia, as judged by light microscopy, were studied by transmission electron microscopy, and their intra-epidermal melanocytes compared with those of five superficial spreading melanomas and seven common benign naevocellular naevi. Intra-epidermal melanocytes in dysplastic naevi exhibited signs of cellular atypia, which were most pronounced in the dysplastic naevi with histological high-grade dysplasia. A correlation between the degree of dysplasia at the light microscopic level and the degree of cytological atypia at the ultrastructural level was noted, and melanocytes in dysplastic naevi with a high degree of dysplasia had ultrastructural features similar to the melanocytes in superficial spreading melanomas. Our observations support the concept that dysplastic naevi fill the biological gap between benign naevocellular naevi and malignant melanomas and suggest that at least some of the dysplastic naevi must be regarded as potential precursor lesions of malignant melanoma, particularly those exhibiting a high degree of histological dysplasia.