This article reviews the concept of dysplasia and the distinguishing features of dysplastic nevi, including their premalignant potential, their biologic markers of tumor progression, and their reproducibly recognizable clinical and histologic characteristics. An additional emphasis is placed on describing gray zone melanocytic neoplasms with hybrid histopathologic and biologic characteristics between nevi and melanoma. In particular, dysplastic nevi with high-grade and dermal dysplasia and other potentially related, prognostically indeterminate, nevomelanomatoid proliferations (PINM tumors), including the more recently recognized nevoid melanoma and minimal deviation neoplasms, are discussed. Because of their overlapping features with more overtly benign and malignant neoplasms, these lesions may confound precise determination of biologic outcome. Accordingly, the concept of prognostic indeterminacy and the use of the term PINM tumors to connote these problematic lesions are introduced.