Atypical spitzoid tumors are a morphologically diverse group of rare melanocytic lesions most frequently seen in children and young adults. As atypical spitzoid tumors bear striking resemblance to Spitz nevus and spitzoid melanomas clinically and histopathologically, it is crucial to determine its malignant potential and predict its clinical behavior. To date, many researchers have attempted to differentiate atypical spitzoid tumors from unequivocal melanomas based on morphological, immonohistochemical, and molecular diagnostic differences. A diagnostic algorithm is proposed here to assess the malignant potential of atypical spitzoid tumors by using a combination of immunohistochemical and cytogenetic/molecular tests. Together with classical morphological evaluation, this algorithm includes a set of immunohistochemistry assays (p16 Ink4a , a dual-color Ki67/MART-1, and HMB45), fluorescence in situ hybridization (FISH) with five probes (6p25, 8q24, 11q13, CEN9, and 9p21), and an array-based comparative genomic hybridization. This review discusses details of the algorithm, the rationale of each test used in the algorithm, and utility of this algorithm in routine dermatopathology practice. This algorithmic approach will provide a comprehensive diagnostic tool that complements conventional histological criteria and will significantly contribute to improve the diagnosis and prediction of the clinical behavior of atypical spitzoid tumors.