The management of histologically dysplastic nevi (HDN) with re-excision versus observation remains controversial due to lack of evidence about associated melanoma outcomes. This systematic review of all published data assessed the development of biopsy site primary cutaneous melanoma among biopsy-proven HDN managed with either re-excision or observation. A total of 5,293 records were screened, 18 articles were assessed in full-text, and 12 studies met inclusion criteria. No controlled trials were identified. Most studies (11/12, 92%) were retrospective chart reviews, and one was both a cross sectional and cohort study. Many studies (9/12, 75%) had no head-to-head comparison groups and either only reported HDN that were re-excised or observed. A total of 2,673 (1535 observed vs 1138 re-excised) HDN of various grades were included. Follow up varied between 2 weeks to 30 years. Nine studies reported that no melanomas developed. Eleven biopsy site melanomas developed across 3 of the studies, 6 among observed lesions (0.39%) and 5 among re-excised lesions (0.44%). Based upon the available evidence the rates of biopsy site primary melanoma was similarly low among observed lesions and re-excised lesions. This suggests that HDNs can be observed with minimal adverse melanoma associated outcomes. However, all included articles were of low quality and further prospective trials could better guide clinical decision making. This article is protected by copyright. All rights reserved.