Melanocytes are pigment-producing cells responsible for coloration of skin and hair. Studies using mouse models have allowed identification of putative melanocyte stem cells within the hair follicle and understanding of hair graying caused by abnormal melanocyte stem cell maintenance. The malignant transformation of melanocytes results in melanoma, the sixth most common cancer in the United States. Recent studies have offered compelling evidence for the existence of cancer stem cells in numerous tumor types, including melanoma. In this review we provide an overview of some of the current findings on follicular melanocyte stem cells, the genetic pathways involved in their regulation and maintenance, and discuss recent studies that support the existence of cancer stem cells in melanoma.