When plants become shaded by neighbouring plants, they perceive a decrease in the red/far-red (R/FR) ratio of the light environment, which provides an early and unambiguous warning of the presence of competing vegetation. The mechanistic bases of the natural genetic variation in response to shade signals remain largely unknown. This study demonstrates that a wide range of genetic variation for hypocotyl elongation in response to an FR pulse at the end of day (EOD), a light signal that simulates natural shade, exists between Arabidopsis accessions. A quantitative trait locus (QTL) mapping analysis was done in the Bayreuth×Shahdara recombinant inbred line population. EODINDEX1 is the most significant QTL identified in response to EOD. The Shahdara alleles at EODINDEX1 caused a reduced response to shade as a consequence of an impaired hypocotyl inhibition under white light, and an accelerated leaf movement rhythm, which correlated positively with the pattern of circadian expression of clock genes such as PRR7 and PRR9. Genetic and quantitative complementation analyses demonstrated that ELF3 is the most likely candidate gene underlying natural variation at EODINDEX1. In conclusion, ELF3 is proposed as a component of the shade avoidance signalling pathway responsible for the phenotypic differences between Arabidopsis populations in relation to adaptation in a changing light environment.