Tobacco used as smoked and smokeless form induces oral mucosal changes in which intra-oral mucosal pigmentation is one of the clinical manifestations. The melanocyte activity responsible for pigment changes is not well documented in the literature. The present study is undertaken to observe clinical and histological changes in oral buccal and labial mucosa of 41 tobacco users and compared with 8 controls. 95.24% of smokers showed pigmentation of both labial and buccal mucosa. Labial mucosa showed a high degree fo pigmentation (81%) than the buccal mucosa (33.3%). 93.3% of alcoholics showed a high degree of pigmentation. Hypermelanocytosis and melanosis were observed in smokers. Pigmentation at the site of quid placement was absent in smokeless tobacco users but mild pigmentation was observed away from the site of quid placement with the concurrent increase in the number of melanocytes and melanocytic activity.