Dysplastic nevi or atypical lentiginous nevi are clinically atypical and have histologic architectural disorder and cytologic atypia. The significance of atypical nevi was emphasized by reports of atypical moles in family members with hereditary melanoma. The genetic change, mutations in the CDKN2A gene, results in a predisposition in certain patient in the development of malignant melanoma. Within members of familial melanomas, the presence of atypical nevi is associated with a 50 % risk of developing melanoma by age 50 years. Therefore, dysplastic nevi are significant in that they can be mimics of melanoma histologically, precursors to melanoma, and indicators of increased melanoma risk. In this chapter, the various features necessary to render the diagnosis of dysplastic nevus as well as the grading of these lesions are outlined.