Coat colour in dogs is influenced by many genes and their polymorphic forms. The main coat colour pattern depends on pigment type, i.e. eumelanin or pheomelanin, whose synthesis is regulated by tyrosinase encoded by the TYRP1 gene. However, other genes also contribute to the ultimate phenotype. One of them is PMEL responsible for the merle coat colour. This review focuses on the role of melanocytes in the phenotypic expression of coat colour, the merle phenotype and genotype, phenotypic diversity of the M allele carriers, health consequences for the carriers of the allele responsible for the merle coat colour and problems with the identification of the M allele carriers based on phenotype and dog breeds with the merle coat colour accepted by the FCI.