Desmoplastic (sclerotic) nevus is an infrequently reported poorly characterized benign melanocytic proliferation, with only 4 case series published to date. To better define this nevus, we examined the clinical and histologic features of 25 lesions. Desmoplastic nevus is seen in both children and adults and can be located on the face, trunk, or extremities. There is a female predominance. Clinically, it can resemble intradermal nevus, atypical nevus, melanoma, and pigmented basal cell carcinoma. These are generally small, symmetric, and well-circumscribed lesions, averaging 3.5 mm in diameter. The most distinctive features include predominantly compound growth, a zonal configuration with greater cellularity in the superficial portion of the lesion, and a mixture of melanocytic phenotypes including type A, B, and C nevus cells, ovoid and dendritic melanocytes, and Spitzoid melanocytes. A distinctive eosinophilic stroma which either resembles that of a dermatofibroma or neurofibroma is always present. Variable amounts of melanin pigment are found in both tumor cells and macrophages, but this is not a prominent feature. Mitotic activity is exceedingly rare (1 case), and pleomorphism is minimal. These lesions are distinct from typical compound nevus, Spitz nevus, epithelioid blue nevus, and desmoplastic melanoma, to which they are often compared. Strict application of these histologic features allows definitive diagnosis of desmoplastic nevus as a distinct form of a benign melanocytic nevus.