Melanoma is the deadliest skin cancer with ever-increasing incidence. Despite the development in diagnostics and therapies, metastatic melanoma is still associated with significant morbidity and mortality. Oncolytic viruses (OVs) represent a class of novel therapeutic agents for cancer by possessing two closely related properties for tumor reduction: virus-induced lysis of tumor cells and induction of host anti-tumor immune responses. A variety of viruses, either in “natural” or in genetically modified forms, have exhibited a remarkable therapeutic efficacy in regressing melanoma in experimental and/or clinical studies. This review provides a comprehensive summary of the molecular and cellular mechanisms of action of these viruses, which involve manipulating and targeting the abnormalities of melanoma, and can be categorized as enhancing viral tropism, targeting the tumor microenvironment and increasing the innate and adaptive antitumor responses. Additionally, this review describes the “biomarkers” and deregulated pathways of melanoma that are responsible for melanoma initiation, progression and metastasis. Advances in understanding these abnormalities of melanoma have resulted in effective targeted and immuno-therapies, and could potentially be applied for engineering OVs with enhanced oncolytic activity in future.