Lipid droplets are fat storage organelles composed of a protein envelope which surrounds a lipid rich core. Dynamic regulation of this protein envelope underlies differential lipid droplet formation and function in diverse cell types. In melanoma, the ability to form lipid droplets has been linked to tumor progression and metastasis, but the role of specific lipid droplet proteins is unknown. To address this, we performed the first proteomic analysis of lipid droplets isolated from melanoma cells. We found that several proteins involved in retinoic acid metabolism were associated with the lipid droplet in melanoma. DHRS3, which is involved in the conversion of all-trans-retinal to all-trans-retinol, is significantly upregulated in the MITFLO/undifferentiated melanoma cell state compared to the MITFHI/melanocytic state. Increased DHRS3 expression is sufficient to drive the MITFHI/melanocytic cells to a more undifferentiated and invasive state. These changes are due to retinoic acid mediated regulation of melanocytic genes through the retinoid X receptors (RXR). Our data demonstrate that melanoma cell state can be regulated by expression of lipid droplet proteins which affect downstream retinoid signaling.