Demography and selection have been recognized for their important roles in shaping patterns of nucleotide variability. To investigate the relative effects of these forces in the genome of Drosophila melanogaster, we used a multi-locus scan (105 fragments) of X-linked DNA sequence variation in a putatively ancestral African and a derived European population. Surprisingly, we found evidence for a recent size expansion in the African population, i.e., a significant excess of singletons at a chromosome-wide level. In the European population, such an excess was not detected. In contrast to the African population, we found evidence for positive natural selection in the European sample: (i) a large number of loci with low levels of variation and (ii) a significant excess of derived variants at the low-variation loci that are fixed in the European sample but rare in the African population. These results are consistent with the hypothesis that the European population has experienced frequent selective sweeps in the recent past during its adaptation to new habitats. Our study shows the advantages of a genomic approach (over a locus-specific analysis) in disentangling demographic and selective forces.