Congenital melanocytic nevi (CMN) are the result of aberrations in the mitogen‐activated protein kinase signal transduction pathway caused by postzygotic somatic mutations. The estimated incidence of newborns with CMN is 1%–2%. The main complications of CMN include proliferative nodules, melanomas, and neurocutaneous melanosis, and the latter two are the most troublesome issues to address. Treatments are primarily taken into account for aesthetic purposes and the reduction of melanoma risk. Due to the much lower incidence of malignant transformation observed in recent studies than in previous data, clinical management paradigms for CMN patients have gradually shifted towards conservative observation and close monitoring. Surgery and lasers are still the main treatments, and targeted therapy may be a promising strategy to help manage complications. With the increase in awareness of mental health, increasing focus has been placed on the quality of life (QoL) and psychological issues of both CMN patients and their parents. Recent studies have revealed that families coping with CMN might endure intense pressure, a major loss in QoL, and psychological problems after diagnosis and during treatment. Here, we sought to present an overview of genetic basis, complications, treatments, and psychological issues related to CMN and hope to provide better management for patients with CMN.