The present invention is a herbal formulation and a method of its application which is effective for treating leucoderma or Vitiligo. The herbal formulation is prepared from extracts obtained from various plant parts of six different herbs namely Psoralea corylifolia, Embelia ribes, Plumbago zeylanica, Cassia fistula, Curcuma lunga and Azadirachta indica, which are the active ingredients that is effective in treating leucoderma. The herbal formulation contains a mixture of three different phases such as hydrophilic pahase, Lipophilic phase and essential oils. The active ingredient acts by activating the proliferation of melanocytes and bring about repigmentation to the affected parts within a short duration. It is a potent, cost effective formulation that does not produce any side effects. Single application per day is sufficient for treatment. Hence it is easy to apply and affordable.