Nature
How Do Chameleons Change Color?
First off, we have to dispel this myth: for the most part chameleons change color to communicate with each other. They have a color for being cool as a cucumber and one for when they're absolutely furious. Kind of like the bright red that moms turn when they're pushed just a little too far, or that lovely shade of purple that kids turn when they hold their breath to get their way.
But we digress. How do chameleons change color?
Under their outer layer of skin, which is essentially transparent, they have three layers of special skin cells. The cells of the layer closest to the surface contain yellow and red pigment. The layer underneath this "yellow" layer is a layer of cells that reflects all light using crystals. Yup, crystals.
That's the tools they use, but how do they use these tools to change colors? That's the job of the crystals.
The yellow pigment cells never change, but the spacing of the cells holding the crystals, which reflect light, does. When the crystals are held really close to each other, they are arranged in such a way that blue light is reflected. Blue from the crystal cells and yellow from the top layer, mix to make the chameleon look green.
Green is a chameleon's color for "relaxed."
When the chameleon is angered, the cells containing the crystals are allowed more room. As the crystals get more room, the light reflected changes from blue to green to yellow to orange to red.
Yellow is a chamelon's "I want to appear threatening" color.
Hormones in the chameleon signal these crystal-holding cells whether it is time cheerfully arrange the crystals tightly or whether it's time to rage and spread the crystals.
Again, what matters is how light the crystals reflect and scatter light, not the pigment of the cells. As a result, a chameleon can tell his rival to back off or his lady-love to come hither. You can read more about this fascinating chameleon-trick