Balloon cell melanoma is a rare melanoma subtype, with only one previous case with dermatoscopy published. It is often non-pigmented, leading to diagnostic difficulty, and there is a tendency for lesions to be thick at diagnosis. We report a case of balloon cell melanoma on the forearm of a 61-year-old man with both polarized and non-polarized dermatoscopy and dermatopathology. It presented as a firm pale nodule with focal eccentric pigmentation. The clinical images evoke a differential diagnosis of dermatofibroma, dermal nevus, Spitz nevus and basal cell carcinoma as well as melanoma. This melanoma was partially pigmented due to a small, pigmented superficial spreading component on the edge of the non-pigmented balloon cell nodule, prompting further evaluation. In retrospect there was the clue to malignancy of polarizing-specific white lines (chrysalis structures) and polymorphous vessels, including a pattern of dot vessels. The reticular lines exclude basal cell carcinoma, polarizing-specific white lines are inconsistent with the diagnosis of dermal nevus and their eccentric location is inconsistent with both Spitz nevus and dermatofibroma. Excision biopsy was performed, revealing a superficial spreading melanoma with two distinct invasive components, one of atypical non-mature epithelioid cells and the other an amelanotic nodular component, comprising more than 50% of the lesion, characterized by markedly distended epithelioid melanocytes showing pseudo-xanthomatous cytoplasmic balloon cell morphology. A diagnosis of balloon cell melanoma, Breslow thickness 1.9 mm, mitotic rate 3 per square millimeter was rendered. Wide local excision was performed, as was sentinel lymph node biopsy, which was negative.