&NA;Rosette formation is a feature that has not been described as occurring in melanocytic neoplasms. We present such a unique case. A 59‐year‐old man presented with an asymptomatic, soft, hairy 3.0 × 2.0‐cm pigmented lesion that had been present for many years in the right external ear, extending from the conchal bowl onto the antitragus area. Examination of histologic sections showed a proliferation of nonatypical and heavily pigmented melanocytes in the superficial dermis and around deep adnexal structures, characteristic of a congenital nevus. In other areas, pigmented spindled and dendritic cells infiltrated thickened collagen bundles in a pattern of a blue nevus. A nodular proliferation of epithelioid melanocytes was seen within the deep dermis and subcutaneous tissue. The periphery of the nodule merged with the surrounding nevus cells. Neoplastic cells with nuclear atypia, melanin pigment, pseudonuclear inclusions, and balloon cell change were present. In addition, there was rosette formation by the tumor cells, with a central aggregate of coarse cell processes. Neuroid cords were also noted. No prominent mitotic figures, necrosis, or significant inflammatory infiltrate were noted. The neoplastic cells were positive for S‐100 protein, Mart‐1, tyrosinase, neuron‐specific enolase, and vimentin. HMB‐45 and Ki‐67 (MIB‐1) labeled only rare neoplastic cells within the proliferative nodule. The tumor cells were negative for synaptophysin, protein gene product 9.5, CD57, epithelial membrane antigen, CD31, and CD34. The central cell processes of the rosettes were negative for trichome, type IV collagen, neurofilament protein, glial fibrillary acidic protein, and tyrosine hydroxylase. We also retrospectively examined 78 congenital nevi of 65 pediatric patients at our institution. Rosette formation was not seen in any of these cases.