The cell-cell adhesion receptor, Mel-CAM/MUC18, is highly expressed on metastatic melanoma cells and is also detectable on primary melanomas but not on normal melanocytes. Previous studies have shown that increased Mel-CAM/MUC18 expression correlates with tumor thickness and metastatic potential. We show here that normal melanocytes and nevus cells in culture express Mel-CAM/MUC18, but expression is down-regulated when cells are co-cultured with keratinocytes. Such keratinocyte-mediated regulation of Mel-CAM/MUC18 expression on melanocytes, nevus cells, and early melanomas can also be demonstrated in situ in patients' specimens. On the other hand, melanoma cells from primary and metastatic lesions constitutively express Mel-CAM/MUC18, and keratinocytes have no modulatory effect. These results suggest that contact between keratinocytes and human melanocytic cells modulates Mel-CAM/MUC18 expression, raising the possibility that escape from keratinocyte control during melanoma development leads to expression of antigens that contribute to the malignant phenotype.