Skin pigmentation is a complex process mediated by melanocytes; mutations in the multiple genes that regulate this process are characteristic of numerous skin disorders, including hyperpigmentation, hypopigmentation, and mixed hyperpigmentation/hypopigmentation. Melanin expression in adult melanocytes is also influenced by additional extrinsic and intrinsic factors such as hormonal changes, inflammation, age, and exposure to UV light. In order to better understand melanocyte biology, there is a need for relevant biological models. The human telomerase reverse transcriptase (hTERT)-immortalized melanocytes described here are a robust model for studying melanocyte function by providing primary melanocyte functionality but exhibiting ‘immortalized’ characteristics for more than 40 population doublings (PDL) without detectable signs of replicative senescence. These dermal melanocytes maintain consistent expression of the melanocyte-specific marker tyrosinase related protein 1 (TYRP-1) but lack expression of the fibroblast-specific TE7 marker. Melanin production is maintained through the lifecycle, declining only after PDL 45. Functional similarity to primary melanocytes was demonstrated by a concentration-dependent increase in melanin production by melanogenesis enhancers latanoprost and stem cell factor, and a reduction in melanin production in response to antagonist hydroquinone. Last, incorporation of hTERT melanocytes into an organotypic co-culture with fibroblasts and keratinocytes enhances the growth, formation, and pigmentation of the culture. Taken together, these data demonstrate that hTERT melanocytes display a form and function remarkably similar to primary melanocytes, and offer a viable solution for building reliable and complex dermal models.