Solid cancers, including melanoma, are typically composed of irregular zones containing both actively cycling and quiescent cells. Despite considerable insight into the molecular mechanisms underlying aberrant cancer cell cycle progression, there is limited understanding as to what regulates the positioning of proliferating or quiescent cancer cells within the complex tumor microenvironment. Moreover, the relationship between cancer cell invasion and cell cycle progression is poorly understood. Here, we utilized the fluorescent ubiquitination-based cell cycle indicator (FUCCI) to longitudinally monitor proliferation and migration of melanoma cells in three-dimensional cell culture and in situ. We found that melanoma cells in a hypoxic microenvironment or in the presence of MAPK inhibitors remained reversibly arrested in G1 for long periods of time. We further demonstrated that invading melanoma cells cycled actively, even after inhibition of the microphthalmia-associated transcription factor (MITF), which caused increased invasiveness. Melanoma xenografts displayed two distinct proliferative architectures characterized by differential distribution of cycling cells, which was regulated by MITF. While MITFhigh melanomas revealed a phenotype characterized by a more random distribution of proliferating cells, MITFlow melanomas were composed of proliferation hot spots and areas of G1-arrested cells. Downregulation of MITF using shRNA in MITFhigh melanomas reversed the phenotype. Taken together, our data challenge the idea that the invasive and proliferative capacity of melanoma cells are mutually exclusive, and uncover the importance of MITF in the proliferative behavior of melanoma cells within the tumor microenvironment.