Background: PReferentially expressed Antigen in MElanoma (PRAME) immunohistochemistry is increasingly used as diagnostic adjunct in the evaluation of melanocytic tumors. The expression and prognostic significance of PRAME in melanomas ≤1.0 mm and its diagnostic utility in the distinction from severely dysplastic compound nevi (SDN) have not been studied. Methods: We investigated and compared the immunohistochemical PRAME expression in 70 matched thin metastasizing and non-metastasizing melanomas and 45 nevi from patients with long-term follow-up (35 SDN and 10 unequivocally benign compound nevi). Results: Diffuse PRAME staining in >75% of lesional epidermal and dermal melanocytes identified 58.6% of thin melanomas but did not distinguish metastasizing from non-metastasizing melanomas (p = 0.81). A superficial atypical melanocytic proliferation of uncertain significance, in which the final diagnostic interpretation favored a SDN was the only nevus with diffuse PRAME expression (1/45). Melanomas and SDN with PRAME immunoreactivity exhibited different staining patterns. Most melanomas (67.6%) showed uniform PRAME expression in the in situ and invasive component, whereas most SDN (81.0%) showed a decreasing gradient with depth. Conclusion: Diffuse intraepidermal and dermal PRAME staining is highly specific for melanomas in the distinction from SDN. PRAME expression is not a prognostic biomarker in melanomas ≤1.0 mm.