"What is the latest theory of why humans lost their body hair? Why are we the only hairless primate?"
by Mark Pagel
June 4, 2007, Scientific American
Among approximately 5000 mammals, humans are the only ones that are "effectively naked." There are three main theories for why humans lack body hair.
1. Aquatic ape hypothesis: Six to eight million years ago, humans may have led a partially aquatic lifestyle due to searching for food in shallow water. Fur is not a good insulator in water and thus humans lost the body hair and evolved higher levels of body fat. At this moment, there is no paleontological evidence backing the theory.
2. When humans began to live in the hot climate of the savannah, body hair would lead to overheating. In order to adapt to this climate, humans evolved to no longer have the body hair. While this adaptation is great during the day, during the cool night, humans would have lost body heat.
3. The newest of the theories suggest that humans lost the fur in order to reduce the number of parasites, such as ticks, lice, and biting flies. Fur is a perfect home for these parasites that carry diseases such as malaria, sleeping sickness, West Nile, and Lyme disease. Since humans had the ability to construct shelter and make clothing, losing the fur would not have been deterimental.
Pagel and his colleague developed the last theory. However, there is a contradiction in his argument. Pagel says that the temperature control theory is flawed because without the hair, humans would not have temperature protection to cold. In his own theory of parasite reduction, he states that cold is not an issue because humans had shelter and clothing.
The lack of body hair may have then been maintained by sexual selection. Clean skin may have indicated good health, and which may be why women are normally more attracted to men with less body hair and take the efforts to remove body hair.
Like with most biological questions, I would say that the answer to this question resides not just in one of these theories, but through a combination of all three (or more).