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Abstract Background Circular RNAs (circRNAs) have been reported to have critical regulatory roles in tumor biology. However, their contribution to melanoma remains largely unknown. Methods CircRNAs derived from oncogene CD151 were detected and verified by analyzing a large number of melanoma samples through quantitative real-time polymerase chain reaction (qRT-PCR). Melanoma cells were stably transfected with lentiviruses using circ_0020710 interference or overexpression plasmid, and then CCK-8, colony formation, wound healing, transwell invasion assays, and mouse xenograft models were employed to assess the potential role of circ_0020710. RNA immunoprecipitation, luciferase reporter assay and fluorescence in situ hybridization were used to evaluate the underlying mechanism of circ_0020710. Results Our findings indicated that circ_0020710 was generally overexpressed in melanoma tissues, and high level of circ_0020710 was positively correlated with malignant phenotype and poor prognosis of melanoma patients. Elevated circ_0020710 promoted melanoma cell proliferation, migration and invasion in vitro as well as tumor growth in vivo. Mechanistically, we found that high level of circ_0020710 could upregulate the CXCL12 expression via sponging miR-370-3p. CXCL12 downregulation could reverse the malignant behavior of melanoma cells conferred by circ_0020710 over expression. Moreover, we also found that elevated circ_0020710 was correlated with cytotoxic lymphocyte exhaustion, and a combination of AMD3100 (the CXCL12/CXCR4 axis inhibitor) and anti-PD-1 significantly attenuated tumor growth. Conclusions Elevated circ_0020710 drives tumor progression via the miR-370-3p/CXCL12 axis, and circ_0020710 is a potential target for melanoma treatment.