The insulin like growth factor (IGF) signaling pathway has been shown to contribute to melanoma progression, but little is known about the role of the IGF binding protein 3 (IGFBP-3) in melanoma biology. The aim of the present study was to characterize expression, function and regulation of IGFBP-3 in malignant melanomas and study its potential as a biomarker. The expression of IGFBP-3 varied between different human melanoma cell lines and reintroduction of the protein in non-expressing cells led to induction of apoptosis. Interestingly, in cell lines expressing endogenous IGFBP-3, siRNA silencing of the protein led to a cell line-dependent decrease in proliferation, but had no effect on apoptosis and invasion. Examination of patient material showed that IGFBP-3 is unexpressed in benign nevi while a slight increase in protein expression was seen in primary and metastatic melanoma. However, expression of the protein was low and no correlation was found with circulating levels of IGFBP-3 in serum, suggesting that IGFBP-3 has limited potential as a predictive marker in malignant melanoma. We showed that promoter methylation of IGFBP-3 occurred in both melanoma cell lines and patient material, implicating epigenetic silencing as a regulation mechanism. Furthermore, expression of the protein was shown to be regulated by the PI3-kinase/AKT and MAPK/ERK1/2 pathways. In summary, our findings suggest that IGFBP-3 can exert dual functional effects influencing both apoptosis and proliferation. Development of resistance to the antiproliferative effects of IGFBP-3 may be an important step in progression of malignant melanomas.