OUTLINE: This is a randomized, double-blind study. Patients are stratified according to personal history of cutaneous melanoma vs family history of cutaneous melanoma in at least 2 blood relatives. Patients are randomized to one of two treatment arms. Arm I: Patients receive topical tretinoin twice daily and oral fenretinide once a day for 6 months. Tretinoin is applied to one half of the back with the untreated side of the back serving as a matched control. Arm II: Patients receive topical tretinoin as in arm I twice daily and oral placebo once a day for 6 months. Treatment continues in both arms in the absence of disease progression or unacceptable toxicity. Patients are followed at 6 months.