Animal coloration has multiple functions including thermoregulation, camouflage, and social signaling, and the requirements of each function may sometimes conflict. Many terrestrial ectotherms accommodate the multiple functions of color through color change. However, the relative importance of these functions and how color-changing species accommodate them when they do conflict are poorly understood because we lack data on color change in the wild. Here, we show that the color of individual radio-tracked bearded dragon lizards, Pogona vitticeps, correlates strongly with background color and less strongly, but significantly, with temperature. We found no evidence that individuals simultaneously optimize camouflage and thermoregulation by choosing light backgrounds when hot or dark backgrounds when cold. In laboratory experiments, lizards showed both UV-visible (300–700 nm) and near-infrared (700–2,100 nm) reflectance changes in response to different background and temperature treatments, consistent with camouflage and thermoregulatory functions, respectively, but with no interaction between the two. Overall, our results suggest that wild bearded dragons change color to improve both thermoregulation and camouflage but predominantly adjust for camouflage, suggesting that compromising camouflage may entail a greater potential immediate survival cost.