Although malignant melanoma is not the most frequent cancer, its incidence is increasing faster than any other. Early diagnosis of melanoma is particularly important because if the diagnosis is made at an early stage when the tumour thickness is less than 1 mm the prognosis is excellent. Dermoscopy is an in vivo method for the early diagnosis of melanoma and the differential diagnosis of pigmented lesions of the skin. It has been shown to increase diagnostic accuracy over clinical visual inspection in the hands of experienced physicians. This paper reviews the principles of dermoscopy, diagnostic strategies and recent technological developments.