Malignant melanoma is notorious for its inter- and intratumour heterogeneity, based on transcriptionally distinct melanoma cell phenotypes. It is thought that these distinct phenotypes are plastic in nature and that their transcriptional reprogramming enables heterogeneous tumours both to undergo different stages of melanoma progression and to adjust to drug exposure during treatment. Recent advances in genomic technologies and the rapidly expanding availability of large gene expression datasets have allowed for a refined definition of the gene signatures that characterize these phenotypes and have revealed that phenotype plasticity plays a major role in the resistance to both targeted therapy and immunotherapy. In this Review we discuss the definition of melanoma phenotypes through particular transcriptional states and reveal the prognostic relevance of the related gene expression signatures. We review how the establishment of phenotypes is controlled and which roles phenotype plasticity plays in melanoma development and therapy. Because phenotype plasticity in melanoma bears a great resemblance to epithelial–mesenchymal transition, the lessons learned from melanoma will also benefit our understanding of other cancer types.