By sequencing 523 ancient humans, we show that the primary source of ancestry in modern South Asians is a prehistoric genetic gradient between people related to early hunter-gatherers of Iran and Southeast Asia. After the Indus Valley Civilization's decline, its people mixed with individuals in the southeast to form one of the two main ancestral populations of South Asia, whose direct descendants live in southern India. Simultaneously, they mixed with descendants of Steppe pastoralists who, starting around 4000 years ago, spread via Central Asia to form the other main ancestral population. The Steppe ancestry in South Asia has the same profile as that in Bronze Age Eastern Europe, tracking a movement of people that affected both regions and that likely spread the distinctive features shared between Indo-Iranian and Balto-Slavic languages.