Melatonin (5-methoxy N-acetyltryptamine) is a hormone synthesized and released from the pineal gland at night, which acts on specific high affinity G-protein coupled receptors to regulate various aspects of physiology and behaviour, including circadian and seasonal responses, and some retinal, cardiovascular and immunological functions. In amphibians, such as Xenopus laevis, another role of melatonin is in the control of skin coloration through an action on melanin-containing pigment granules (melanosomes) in melanophores. In these cells, very low concentrations of melatonin activate the Mel(1c) receptor subtype triggering movement of granules toward the cell centre thus lightening skin colour. Mel(1c) receptor activation reduces intracellular cAMP via a pertussis toxin-sensitive inhibitory G-protein (Gi), but how this and other intracellular signals regulate pigment movement is not yet fully understood. However, melanophores have proven an excellent model for the study of the molecular mechanisms which coordinate intracellular transport. Melanosome transport is reversible and involves both actin- (myosin V) and microtubule-dependent (kinesin II and dynein) motors. Melanosomes retain both kinesin and dynein during anterograde and retrograde transport, but the myosin V motor seems to be recruited to melanosomes during dispersion, where it assists kinesin II in dominating dynein thus driving net dispersion. Recent work suggests an important role for dynactin in coordinating the activity of the opposing microtubule motors. The melanophore pigment aggregation response has also played a vital role in the ongoing effort to devise specific melatonin receptor antagonists. Much of what has been learnt about the parts of the melatonin molecule required for receptor binding and activation has come from detailed structure-activity data using novel melatonin ligands. Work aiming to devise ligands specific for the distinct melatonin receptor subtypes stands poised to deliver selective agonists and antagonists which will be valuable tools in understanding the role of this enigmatic hormone in health and disease.