Coloration is a diagnostic tool for identifying mammals, but inquiry into its function has lain dormant for almost a century. Recently, the topic has been revived and modern phylogenetic methods have been applied to large data sets, allowing researchers to assess, for the first time, the relative importance of three classic hypotheses for the function of coloration in mammals: concealment, communication, and regulation of physiological processes. Camouflage appears to be the single most important evolutionary force in explaining overall coloration in mammals, whereas patches of colored fur are used for intraspecific signaling. Sexual selection is associated with flamboyant ornamentation in a minority of primates and other restricted mammalian taxa, but to a far lesser extent than in birds. Interspecific signaling among mammals includes aposematic coloration, exaggeration of signals to deter pursuit, and lures for misdirecting predatory attack. Physiological causes of coloration, including melanism, are evident but poorly researched. The relative importance of evolutionary forces responsible for external coloration varies greatly between vertebrate taxa, but the reasons for this variation are not yet understood.