Epidermal naevi are common cutaneous mosaic disorders that occur in 0.1-0.3% of live births. They are subdivided into keratinocytic and organoid naevi, the latter including naevus sebaceus (NS). Typically, NS develops as a yellowish-orange plaque on the scalp, and represents a hamartoma containing epidermal, sebaceous and apocrine elements. The histological features of NS sampled in childhood include hyperkeratosis, acanthosis, increased sebaceous lobules, and primitive hair follicles. During puberty, most lesions develop more prominent sebaceous and apocrine components. Subsequently, secondary tumours may occur in around 25% of NS; most lesions are benign (e.g. trichoblastomas, syringocystadenoma papilliferum or other basaloid proliferations), although malignant tumours arising within NS can occur (< 1%). Recently, somatic mosaicism has been shown, with activating Ras mutations in HRAS or KRAS in NS lesional keratinocytes (but not in adjacent nonlesional skin or dermal fibroblasts). These mutations lead to constitutive activation of the RAF-MEK-ERK and phosphoinositide 3-kinase signalling pathways, and result in increased cellular proliferation. Similar but more extensive mosaicism underlies Schimmelpenning-Feuerstein-Mims syndrome. The most common mutation is c.37G>C (p.Gly13Arg) in HRAS, which is present in > 90% of NS. This mutation also seems to be present in NS cases that develop secondary tumours, although no additional mutations (second hit) or other genetic events have yet been identified. Treatment of NS often involves prophylactic surgical excision, but the recent identification of key epidermal signalling abnormalities underlying the cell proliferation means that future development of new medical treatments for NS that target the aberrant signalling pathways may also be feasible.