Melanin is a pigment found in the skin, hair, and eyes of vertebrate animals. Specifically, melanin is produced in melanocytes, a type of cell which is found in the epidermis of the skin. Melanocytes are transparent cells with dendrites.
Melanin protects the skin from damage by ultraviolet (UV) light and is the pigment which is produced in response to damage by the sun, causing skin to tan to protect against further damage. However, if the melanocytes become overwhelmed by ultraviolet radiation, they can turn cancerous and a very dangerous malignancy called melanoma results.
In vertebrate albino animals, melanin is the pigment which is missing from their bodies. Albinism or a less severe genetic lack of melanin results in light-colored skin, eyes, and hair. On the other hand, an excess of melanin is called melanism -- this can be an inherited condition, and the term "melanistic" is often used in biology to describe organisms that are darker than others in their populations.
To correct the Webster's definition below, the melanin molecule is formed when the amino acid tyrosine is oxidized.
From the science dictionary at http://biotech.icmb.utexas.edu/