How does a chameleon change its colour?

Chameleons have specialized cells, collectively called chromatophores, that lie in layers under their transparent outer skin. The cells in the upper layer, called xanthophores and erythrophores, contain yellow and red pigments respectively. Below these is another layer of cells called iridophores or guanophores, and they contain the colorless crystalline substance guanine. These are particularly strong reflectors of the blue part of incident light. If the upper layer of chromatophores appears mainly yellow, the reflected light becomes green (blue plus yellow). A layer of dark melanin contained in melanophores is situated even deeper under the reflective iridophores. The melanophores determine the 'lightness' of the reflected light. These specialized cells are full of pigment granules, which are located in their cytoplasm. Dispersion of the pigment granules in the cell grants the intensity of appropriate color. If the pigment is equally distributed in the cell, the whole cell has the intensive color, which depends on the type of chromatophore cell. If the pigment is located only in the centre of the cell, cell appears to be transparent. All these pigment cells can rapidly relocate their pigments, thereby influencing the color of the chameleon.