Minecraft developer Notch laid out the plans for mod support in the game in a post on his blog. With the disclaimer that it still has to pass inspection from the lawyers, here's the gist of it. Anyone can sign up, for free, to be a "mod developer" by agreeing to a licensing deal. That deal stipulates that mods can only be played by people who have purchased the base game. Teams that want to sell their work for profit will also need to enter into a separate licensing deal for that. Mods can not be malicious. And lastly, the Minecraft team retains the right to use any mod idea and implement it themselves.

That last bit caused some concern amongst would-be mod makers. As reassurance, Notch updated his post saying, "if you make a good mod or something else based on the source code, it's highly likely we will want to license it." He also stated in the original post that it is their desire to sell good mods and that there could be some sort of mod marketplace for the game. Alternatively, Notch said they could also simply purchase nice mods and make them part of the base game.

When originally announced, the mod api was going to be sold. Citing "overwhelming feedback," Notch later posted that it would in fact be free. He said it was never the intention to profit from it, only to ensure a base level of quality by making teams be serious enough about their project to put up some money to make it.