KIT mutations are frequent in acral, mucosal and chronic sun-damage (CSD) melanoma, but little is known about the mechanisms driving the transformation of KIT-mutated melanocytes into melanoma cells. We showed that exposition of melanocytes harboring the L576PKIT mutation to a hypoxic environment induced their transformation into malignant cells. Transformed L576PKIT melanocytes showed downregulation of MITF expression characteristic of melanoma initiating cells (MICs). In agreement, these cells were able to form spheres in neural crest cell medium and low-adherence conditions, also a characteristic of MICs. Downregulation of MITF by RNA interference induced transformation of KIT-mutated melanocytes in normoxia and acquisition of a MIC phenotype by these cells. Hence, low level of MITF cooperates with oncogenic KIT to transform melanocytes. Activation of the cAMP pathway in transformed L576PKIT melanocytes stimulated MITF expression, and reduced cellular proliferation and sphere formation. These findings highlight the essential role of MITF in revealing the oncogenic activity of KIT in melanocytes and suggest that the cAMP pathway is a therapeutic target in KIT-mutated melanoma.