The melanocortin 1 receptor (MC1R) is a G protein-coupled receptor crucial for the regulation of melanocyte proliferation and function. Upon binding melanocortins, MC1R activates several signaling cascades, notably the cAMP pathway leading to synthesis of photoprotective eumelanin. Polymorphisms in the MC1R gene are a major source of normal variation of human hair color and skin pigmentation, response to ultraviolet radiation (UVR), and skin cancer susceptibility. The identification of a surprisingly high number of MC1R natural variants strongly associated with pigmentary phenotypes and increased skin cancer risk has prompted research on the functional properties of the wild-type receptor and frequent mutant alleles. We summarize current knowledge on MC1R structural and functional properties, as well as on its intracellular trafficking and signaling. We also review the current knowledge about the function of MC1R as a skin cancer, particularly melanoma, susceptibility gene and how it modulates the response of melanocytes to UVR.