What causes skin discoloration?

Sun and Hormones. Skin damage due to sun exposure is one of the main causes of skin discoloration. Also, hormones, like estrogen can cause darkening of the skin, known as melasma. Also, there are some fungal infections that can cause skin discoloration as well.
Many possibilities. There are many things that may cause discoloration of the skin. Several types of inflammatory conditions of the skin, poor circulation, allergic reactions, bacterial, viral or fungal infections, insect bites, friction, and cancer can all cause discoloration of the skin. Have it evaluated by a professional and get the appropriate treatment.