Different melanocytic nevi have been reported as being associated with dermal cysts. Signet ring cell melanocytic nevus is a rare variant of melanocytic nevus characterized by cells with signet ring morphology within a common melanocytic nevus. This article describes an exceptional case of melanocytic nevus composed exclusively of signet ring cells over a trichilemmal cyst. Histologically, above the cyst, there was a small, symmetrical and sharply demarcated lesion showing a compound proliferation of small, round, monomorphous cells with signet ring morphology. Immunohistochemically, signet ring cells were negative for cytokeratin AE1/3, leukocyte common antigen, HMB-45, and CD34. Occasionally, isolated signet ring cells were positive for S-100 and melan A. Melanocytic nevus composed of signet ring cells should raise the differential diagnosis with other cutaneous tumors exhibiting signet ring cells. Previous cases of this entity reported in the literature are also reviewed.