General:
S.N. DASGUPTA, A History of Indian Philosophy, 5 vol. (1922-55, reprinted 1977), a comprehensive account, though its scholarship tends to outweigh philosophical insight;
M. HIRIYANNA, Outlines of Indian Philosophy (1932, reissued 1975), lucidly written, based on reliable acquaintance with original source material but leaving out many minor, though important, schools of thought;
S. RADHAKRISHNAN, Indian Philosophy, 2 vol. (1923-27), a very readable account written from an idealistic point of view--may often mislead;
S.C. VIDYABHUSAN, A History of the Mediæval School of Indian Logic (1909), still indispensable, though outdated and containing many inaccuracies; 
U.N. GHOSHAL, A History of Indian Political Ideas: The Ancient Period and the Period of Transition to the Middle Ages (1959);
DONALD H. BISHOP (ed.), Indian Thought: An Introduction (1975), 15 historical essays by Indian scholars;
BALBIR SINGH, The Conceptual Framework of Indian Philosophy (1976), a study of 12 fundamental concepts;
KARL H. POTTER (ed.), The Encyclopedia of Indian Philosophies (1970- ), a very valuable source. For current articles on Indian philosophy, see Philosophy East and West (quarterly) and The Journal of Indian Philosophy (quarterly).

Critical studies from the point of view of modern Western thought:
KARL H. POTTER, Presuppositions of India's Philosophies (1963, reprinted 1976);
NINIAN SMART, Doctrine and Argument in Indian Philosophy (1964);
and B.K. MATILAL, Epistemology, Logic and Grammar in Indian Philosophical Analysis (1971), three books that, together, form a good introduction to the logical, dialectical, and analytical aspects of Indian philosophy; 
KEWAL KRISHAN MITTAL, Materialism in Indian Thought (1974).
 

English translations of Sanskrit sources:
S. RADHAKRISHNAN and C.A. MOORE (eds.), A Source Book in Indian Philosophy (1957), an excellent one-volume collection of source materials (does not include many medieval masterpieces on logic and epistemology);
The Thirteen Principal Upanishads, 2nd ed., trans. by R.E. HUME (1931);
The Bhagavadgita, trans. by S. RADHAKRISHNAN (1948).
 

Selected readings on the systems and texts:
(Upanisads): ARUN SHOURIE, Hinduism, Essence and Consequence: A Study of the Upanishads, the Gita, and the Brahma-Sutras (1980), an analysis and assessment of Brahmanical Hinduism; 
R.D. RANADE, A Constructive Survey of Upanishadic Philosophy, 2nd ed. (1968). (Bhagavadgita):
SRI AUROBINDO, Essays on the Gita (1916-20, reissued 1974). (Mahabharata): 
EDWARD W. HOPKINS, The Great Epic of India (1901, reprinted 1973).
(Carvakas and Ajivikas): DAKSHINARANJAN SHASTRI, A Short History of Indian Materialism, Sensationalism and Hedonism (1930);
DALE RIEPE, Early Indian Philosophical Materialism (1954);
A.L. BASHAM, The History and Doctrines of the Ajivikas (1951, reprinted 1981).
(Buddhism): BENIMADHAB BARUA, Prolegomena to a History of Buddhist Philosophy, 2nd ed. (1974);
DAVID J. KALUPAHANA, Buddhist Philosophy: A Historical Analysis (1976);
A.L. HERMAN, An Introduction to Buddhist Thought: A Philosophic History of Indian Buddhism (1983);
TH. STCHERBATSKY, Buddhist Logic, 2 vol. (Eng. trans. 1930-32, reissued 1970), a work of great scholarship, marred by too-hasty comparisons with 19th-century European philosophers, and containing an English translation of Dharmakirti's Nyayavindu;
T.R.V. MURTY, The Central Philosophy of Buddhism (1955, reissued 1980);
(Mimamsa): A. BERRIEDALE KEITH, Karma-mimamsa (1921, reprinted 1978); P. SHASTRI, 
Introduction to the Purva Mimamsa, 2nd ed. (1980). (Vedanta): 
ERIC J. LOTT, Vedantic Approaches to God (1980), a clear 
introduction to the religious philosophies of Vedanta; 
JACOB KATTACKAL, Religion and Ethics in Advaita (1980, 
reprinted 1982); T.M.P. MAHADEVAN, Gaudapada: A Study in 
Early Advaita (1952; 4th ed., 1975); ELIOT DEUTSCH, Advaita 
Vedanta: A Philosophical Reconstruction (1969, reissued 
1973); P.N. SRINIVASACHARI, The Philosophy of Vishistadvaita 
(1943, reprinted 1973). (Vaisnavism and Shaivism): 
R.G. BHANDARKAR, Vaisnavism, Shaivism and Minor Religious 
Systems (1913, reissued 1980). (Nyaya-Vaishesika): 
H. UI, The Vaisheshika Philosophy, 2nd ed. (1962); N.S. 
JUNANKAR, Gautama: The Nyaya Philosophy (1978); 
S.C. CHATTERJEE, Nyaya Theory of Knowledge (1939); D.H. 
INGALLS, Materials for the Study of Navya-Nyaya Logic 
(1951); J.N. MOHANTY (trans.), Gangesa's Theory of Truth 
(1966); B.K. MATILAL, The Navya-Nyaya Doctrine of Negation 
(1969). (Samkhya-Yoga): S.N. DASGUPTA, The Study of 
Patanjali (1920); MIRCEA ELIADE, Yoga: Immortality and 
Freedom, 2nd ed. (1969; originally published in French, 
1954); KAREL WERNER, Yoga and Indian Philosophy (1977), 
a wide-ranging introduction. (Mughal philosophy): AZIZ 
AHMAD, Studies in Islamic Culture in the Indian Environment 
(1964).
 

Contemporary Indian philosophy:
 S. RADHAKRISHNAN, The Reign of Religion in Contemporary 
Philosophy (1920); RABINDRANATH TAGORE, Religion of Man 
(1931, reprinted 1981); S. RADHAKRISHNAN, Eastern Religions 
and Western Thought (1939, reissued 1974); SRI AUROBINDO, 
The Life Divine (1949, reissued 1982); S. RADHAKRISHNAN 
and J.H. MUIRHEAD (eds.), Contemporary Indian Philosophy, 
2nd ed. (1952); P.T. RAJU, Idealistic Thought of India 
(1953, reprinted 1973); KALIDAS BHATTACHARYYA, Studies 
in Philosophy, 2 vol. (1956-58), and (ed.), Recent Indian 
Philosophy (1962), and Philosophical Papers (1969); 
G. MISRA, Analytical Studies in Indian Philosophical Problems 
(1970); K.S. MURTY and K.R. RAO (eds.), Current Trends in 
Indian Philosophy (1972); MARGARET CHATTERJEE (ed.), Contemporary 
Indian Philosophy (1974); J.N. MOHANTY, "Philosophy in India: 
1967-1973," Review of Metaphysics, 28:54-84 (1974); N.K. 
DEVARAJA (ed.), Indian Philosophy Today (1975); DALE 
RIEPE, Indian Philosophy Since Independence (1979), an 
assessment from the perspective of historical and dialectical 
materialism; T.M.P. MAHADEVAN and G.V. SAROJA, Contemporary 
Indian Philosophy (1981), brief accounts of the lives and 
thought of eight philosophers of the first half of the 20th 
century.