Telomerase activation, being a cardinal requirement for immortalization, is a crucial step in the development of malignancy. With a view toward diagnostic and biological aspects in melanocytic neoplasia, we investigated the relative levels of telomerase activity in 72 nevi and 16 malignant melanomas by means of a modified telomeric repeat amplification protocol (TRAP) assay, including an internal amplification standard. We further compared telomerase activity with the expression of two different proliferation-specific proteins, Ki-67 and repp86, a protein expressed exclusively in the cell cycle phases S, G2, and M. Telomerase activity was associated with the overall growth fraction (Ki-67) but showed a closer correlation with the expression of repp86. Both telomerase activity and proliferation indices discriminated clearly between malignant melanomas and nevi, but not between common and dysplastic nevi. Nonetheless, a portion of nevi exhibited markedly elevated telomerase activity levels without proportionally increased proliferation. This was independent of discernible morphological changes. Clinicopathological correlations showed an association between high telomerase activity and early metastatic spread in melanomas, linking telomerase to tumor biology. Our results provide arguments in favor of an occasional progression from nevi to melanomas and imply that proliferation measurements in combination with telomerase assays may help to elicit early malignant transformation that is undetectable by conventional morphology.