Sox proteins are transcriptional regulators with a high-mobility-group domain as sequence-specific DNA-binding domain. For function, they generally require other transcription factors as partner proteins. Sox proteins furthermore affect DNA topology and may shape the conformation of enhancer-bound multiprotein complexes as architectural proteins. Recent studies suggest that Sox proteins are tightly regulated in their expression by many signalling pathways, and that their transcriptional activity is subject to post-translational modification and sequestration mechanisms. Sox proteins are thus ideally suited to perform their many different functions as transcriptional regulators throughout mammalian development. Their unique properties also cause Sox proteins to escape detection in many standard transcription assays. In melanocytes, studies have so far focused on the Sox10 protein which functions both during melanocyte specification and at later times in the melanocyte lineage. During specification, Sox10 activates the Mitf gene as the key regulator of melanocyte development. At later stages, it ensures cell-type specific expression of melanocyte genes such as Dopachrome tautomerase. Both activities require cooperation with transcriptional partner proteins such as Pax-3, CREB and eventually Mitf. If predictions can be made from other cell lineages, further functions of Sox proteins in melanocytes may still lie ahead.