Spitz naevus is a benign melanocytic lesion that shares many histological features with melanoma. While Spitz naevi characteristically occur in children and young adults and melanomas in the middle-aged and elderly, either tumour can occur in patients of any age. In many cases, the histopathological diagnosis of Spitz naevus is straightforward, particularly in small lesions displaying many or all of the typical histological features and occurring in young patients. Tumours that deviate from the classic description, however, cause difficulties in diagnosis. In this review, we highlight histopathological features of Spitz naevi and those that may be useful in distinguishing Spitz naevi from melanomas. We find that the presence of good symmetry, Kamino bodies, and uniformity of cell nests or sheets from side-to-side favours a Spitz naevus. The presence of abnormal mitoses, a dermal mitotic rate of >2/mm2, and mitotic figures within 0.25 mm of the deep border of the lesion favours a melanoma. Immunohistochemical stains for HMB45 and Ki67 sometimes provide additional useful information. Despite this, in some cases it may not be possible to give an unequivocal diagnosis. Recommendations for the reporting of such cases are provided. New techniques have also demonstrated chromosomal, molecular and genetic differences between Spitz naevi and melanomas. This report highlights these new data and speculates on their possible future role in the diagnosis of borderline lesions.