A group of 420 neonates underwent total cutaneous and oral mucosal examinations during the first week of life. Skin lesions were seen in almost every baby (99.3%). The eight most common dermatoses were desquamation (65.0%), Epstein's pearls (56.0%), sebaceous hyperplasia (48.0%), milia (36%), toxic erythema (34.8%), salmon patch (33.8%), hypertrichosis (29.0%), and Mongolian spot (25.5%). Congenital melanocytic nevi were clinically diagnosed in 9 of 420 babies (2.1%); the majority of the lesions were small, that is, less than 1.5 cm in diameter. These neonates had a dark complexion (all had brown or black hair, and most had an olive skin color) and came from families with no previous history of cutaneous melanoma. In contrast, all 19 babies with a previous family history of melanoma had a fair complexion (blond or light brown hair and alabaster skin color) but no congenital melanocytic nevi. These findings may suggest that small congenital melanocytic nevi are markers for persons with a decreased risk of melanoma, because dark-skinned persons are at a lower risk. On the other hand, small congenital melanocytic nevi may be precursors of melanoma. Only prospective studies will determine the magnitude of this risk and thereby optimize management.