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Skin pigmentation is one of the most variable phenotypic traits in humans. A non-synonymous substitution (rs1426654) in the third exon of SLC24A5 accounts for lighter skin in Europeans but not in East Asians. A previous genome-wide association study carried out in a heterogeneous sample of UK immigrants of South Asian descent suggested that this gene also contributes significantly to skin pigmentation variation among South Asians. In the present study, we have quantitatively assessed skin pigmentation for a largely homogeneous cohort of 1228 individuals from the Southern region of the Indian subcontinent. Our data confirm significant association of rs1426654 SNP with skin pigmentation, explaining about 27% of total phenotypic variation in the cohort studied. Our extensive survey of the polymorphism in 1573 individuals from 54 ethnic populations across the Indian subcontinent reveals wide presence of the derived-A allele, although the frequencies vary substantially among populations. We also show that the geospatial pattern of this allele is complex, but most importantly, reflects strong influence of language, geography and demographic history of the populations. Sequencing 11.74 kb of SLC24A5 in 95 individuals worldwide reveals that the rs1426654-A alleles in South Asian and West Eurasian populations are monophyletic and occur on the background of a common haplotype that is characterized by low genetic diversity. We date the coalescence of the light skin associated allele at 22-28 KYA. Both our sequence and genome-wide genotype data confirm that this gene has been a target for positive selection among Europeans. However, the latter also shows additional evidence of selection in populations of the Middle East, Central Asia, Pakistan and North India but not in South India.