The pathology of melanocytic tumours remains one of the most challenging and controversial fields in diagnostic histopathology, and it is one of the leading causes for litigation against pathologists. This is due largely to the wide morphological spectrum and often only subtle differentiating features with potential for both under- as well as overdiagnosis of melanoma. Particular pitfalls include the diagnosis of rare and unusual melanoma variants and melanoma resembling naevi. Furthermore, a subset of benign naevi may show concerning features associated more typically with a diagnosis of melanoma. These features include irregular junctional components with pagetoid spread, melanocyte atypia, lack of dermal maturation, dermal mitotic activity, intense melanin pigmentation, a desmoplastic stromal response and dermal regression. This paper focuses on a selected group of benign melanocytic lesions that are notoriously difficult to diagnose, and includes halo naevi, recurrent naevi, mitotically active naevi, desmoplastic naevi, clonal and deep penetrating naevi as well as cellular and plaque type blue naevi. The clinical and histological presentation is discussed with emphasis on clues to the correct diagnosis and distinguishing features from melanoma. Awareness of these entities and their distinguishing clinical and morphological characteristics is essential, as they present major diagnostic pitfalls.