Solar ultraviolet radiation (UV) is a major environmental factor that dramatically alters the homeostasis of the skin as an organ by affecting the survival, proliferation and differentiation of various cutaneous cell types. The effects of UV on the skin include direct damage to DNA, apoptosis, growth arrest, and stimulation of melanogenesis. Long-term effects of UV include photoaging and photocarcinogenesis. Epidermal melanocytes synthesize two main types of melanin: eumelanin and pheomelanin. Melanin, particularly eumelanin, represents the major photoprotective mechanism in the skin. Melanin limits the extent of UV penetration through the epidermal layers, and scavenges reactive oxygen radicals that may lead to oxidative DNA damage. The extent of UV-induced DNA damage and the incidence of skin cancer are inversely correlated with total melanin content of the skin. Given the importance of the melanocyte in guarding against the adverse effects of UV and the fact that the melanocyte has a low self-renewal capacity, it is critical to maintain its survival and genomic integrity in order to prevent malignant transformation to melanoma, the most fatal form of skin cancer. Melanocyte transformation to melanoma involves the activation of certain oncogenes and the inactivation of specific tumor suppressor genes. This review summarizes the current state of knowledge about the role of melanin and the melanocyte in photoprotection, the responses of melanocytes to UV, the signaling pathways that mediate the biological effects of UV on melanocytes, and the most common genetic alterations that lead to melanoma.