Ultraviolet radiation (UVR) can have a beneficial biologic impact on skin, but it is also the most significant environmental risk factor for skin cancer development. Photocarcinogenesis comprises a complex interplay between the carcinogenic UVR, skin, and the immune system. UVB is absorbed by the superficial skin layers and is mainly responsible for direct DNA damage, which, if unrepaired, can lead to mutations in key cancer genes. UVA is less carcinogenic, penetrates deeper in the dermis, and mainly causes indirect oxidative damage to cellular DNA, proteins, and lipids, via photosensitized reactions. UVR not only induces mutagenesis, altering proliferation and differentiation of skin cells, but also has several immunosuppressive effects that compromise tumor immunosurveillance by impairing antigen presentation, inducing suppressive cells, and modulating the cytokine environment. This review focuses upon molecular and cellular effects of UVR, regarding its role in skin cancer development.