The diagnosis of dysplastic naevus is in danger of falling into disuse in response to the continuing dispute as to its definition. This review tries to show that the lesion can be defined using histological and clinical criteria but that the individual features are not, by themselves, peculiar to dysplastic naevi. They are shared, in varying degrees, by other benign melanocytic naevi and by melanoma. The significance of these similarities is explained on the basis of the maturation of ordinary naevi and degrees of deviation from that common path. The recognition of severely aberrant differentiation in the form of classic dysplastic naevus is worthwhile, since in the appropriate clinical context and particularly in association with a family history of melanoma, it confers a very high risk of developing melanoma.