How do chameleons change color?

Chameleons have a layer of skin cells called iridophores containing lattices of guanine nanocrystals. By relaxing or tightening that lattice, the animal changes the spacing between crystals, which changes which wavelengths of light are reflected, producing structural color rather than pigment color. A 2015 study at the University of Geneva established this mechanism, correcting the older assumption that color change worked mainly through dispersing pigment in cells called chromatophores, though pigment cells do contribute to the darker and yellower tones layered on top.

The purpose is largely social and thermal rather than concealment. Males display bright colors during territorial confrontations and courtship, and the loser of a contest often turns dark and subdued. Color also shifts with temperature, since darker skin absorbs more heat, which matters for an ectothermic animal that regulates temperature behaviorally. Camouflage plays some role, and a chameleon's resting coloration matches its habitat well, but the dramatic transformations people picture are communication rather than an attempt to disappear, and chameleons do not turn plaid on a plaid background.

Related and often confused: many other animals change color by different mechanisms. Cephalopods including octopus, squid, and cuttlefish achieve far faster and more sophisticated changes through direct neural control of pigment sacs combined with reflective layers, which is the most impressive color-changing system known and is used for both camouflage and signaling despite the animals themselves being colorblind. Some fish, crustaceans, and frogs change color hormonally over longer periods. The chameleon's fame owes as much to being a familiar terrestrial animal with a memorable name as to being the best at it.