Abstract: Genital melanocytic nevus represents a distinct form of melanocytic proliferation, which can exhibit significant atypia, both clinically and histologically. In a background of lichen sclerosus (LS), the histologic changes could be misconstrued as indicative of malignant melanoma. We present herein a case of the atypical genital nevus of childhood complicated by LS, and a review of the literature is performed. Tissue was available for routine light microscopy and immunohistochemical evaluation to assess the expression of soluble adenylyl cyclase. Fluorescent in situ hybridization studies were conducted to assess for abnormalities in Myb1, CCND1, RREB1 and CEP6. The specimen showed an atypical compound melanocytic proliferation arising in a background of LS. The lesion exhibited significant architectural atypia based on the high-density confluent nature of the junctional melanocytic proliferation with epidermal effacement, rare areas of pagetoid ascent, and the heavily pigmented epithelioid quality of the melanocytes. Fluorescent in situ hybridization studies were normal. The soluble adenylyl cyclase antibody preparation demonstrated a benign nevus-like pattern. The lesion was felt to represent an atypical genital melanocytic nevus, which can resemble a partially regressed melanoma in a background of LS. It is very important for the pathologist to be aware of this entity to avoid misdiagnosis.