We report a case of an extremely rare histologic combination of pilomatrix or pilomatrical carcinoma with admixed melanocytes within the same tumor mass. Pilomatrix carcinoma is a neoplasm of low-grade malignancy that is characterized by a tendency for recurrence but low risk of metastasis. A 77-year-old male presented with a nodule on the bridge of the nose that was excised. Histologically, it was typified by asymmetry and poor circumscription, the presence of several variably sized and shaped basaloid aggregations, and surface ulceration. The tumors were composed of pleomorphic basaloid cells with prominent nucleoli and frequent mitoses (some of which were atypical) accompanied by central areas with keratotic material, shadow cells, and foci of necrosis. In addition, intermingled with the pilomatrix carcinoma, several easily identified pigmented cells with dendritic processes were present singly and as small aggregates. There was no atypia associated with the melanocytic component. Immunohistochemistry revealed the CK14 to be positive mainly within the keratinizing and the squamous epithelial elements of the tumor. The melanocytic component was strongly immunoreactive for S100, melanoma cocktail (HMB45 and Melan-A), and microphthalmia transcription factor. Pilomatrix carcinoma with melanocytes should be distinguished from the conventional pilomatrixoma with pigmentation, melanocytic matricoma, melanoma, and pigmented basal cell carcinoma with matrical differentiation. Clinicians and pathologists should be aware of the occurrence of pilomatrix carcinoma with melanocytes because of its potential for diagnosis as melanoma. This peculiar lesion recapitulates the intimate relationship existing between matrical epithelium and melanocytes in the embryonal hair follicle or in the anagen stage of the hair cycle. It is possible that sun damage played a role in stimulating migration of melanocytes among matrical cells in this case.