For automatic detection of skin lesion, segmentation has always been a primary issue. Many techniques for segmentation and border detection of skin lesion have been discussed in literature. In this paper, we have proposed a multilevel thresholding algorithm which is primarily based on Otsu's method to find between class variance of image histogram. Our algorithm is able to divide image into multiple classes based on intensity level with optimized selection of threshold values. Our proposed approach has shown quite reasonable results and is computationally fast and easy. © 2011 IEEE.