The coastal belt of Karunagappally, Kerala, India, is known for high background radiation (HBR) from thorium-containing monazite sand. In coastal panchayats, median outdoor radiation levels are more than 4 mGy y−1 and, in certain locations on the coast, it is as high as 70 mGy y−1. Although HBR has been repeatedly shown to increase the frequency of chromosome aberrations in the circulating lymphocytes of exposed persons, its carcinogenic effect is still unproven. A cohort of all 385,103 residents in Karunagappally was established in the 1990’s to evaluate health effects of HBR. Based on radiation level measurements, a radiation subcohort consisting of 173,067 residents was chosen. Cancer incidence in this subcohort aged 30-84 y (N = 69,958) was analyzed. Cumulative radiation dose for each individual was estimated based on outdoor and indoor dosimetry of each household, taking into account sex- and age-specific house occupancy factors. Following 69,958 residents for 10.5 years on average, 736,586 person-years of observation were accumulated and 1,379 cancer cases including 30 cases of leukemia were identified by the end of 2005. Poisson regression analysis of cohort data, stratified by sex, attained age, follow-up interval, socio-demographic factors and bidi smoking, showed no excess cancer risk from exposure to terrestrial gamma radiation. The excess relative risk of cancer excluding leukemia was estimated to be −0.13 Gy−1 (95% CI: −0.58, 0.46). In site-specific analysis, no cancer site was significantly related to cumulative radiation dose. Leukemia was not significantly related to HBR, either. Although the statistical power of the study might not be adequate due to the low dose, our cancer incidence study, together with previously reported cancer mortality studies in the HBR area of Yangjiang, China, suggests it is unlikely that estimates of risk at low doses are substantially greater than currently believed.