The systematics of the dusky striped squirrel, Funambulus sublineatus (Waterhouse, 1838) are reassessed against new evidence following a revision of its genus, Funambulus Lesson, 1835. Mitochondrial DNA suggests that the Sri Lankan subspecies of F. sublineatus is the sister taxon of Funambulus layardi Blyth, 1849, despite its phenotypic similarity to the nominate species. Morphological and mtDNA evidence is presented for these species plus additional mtDNA data from Funambulus palmarum (Linnaeus, 1766) and Funambulus pennantii Wroughton, 1905. Morphometric data indicate that the two taxa conventionally considered subspecies of F. sublineatus are sufficiently distinct for them to be ranked separately, resulting in two further endemic mammal species in India and Sri Lanka and an increase in Funambulus diversity. The name of the Sri Lankan species changes to Funambulus obscurus (Pelzeln and Kohl 1886). Whether the mtDNA phylogeny is a true reflection of F. obscurus and F. layardi remains unresolved pending further data.