Reptiles use pterin and carotenoid pigments to produce yellow, orange, and red colors. These conspicuous colors serve a diversity of signaling functions, but their molecular basis remains unresolved. Here, we show that the genomes of sympatric color morphs of the European common wall lizard (Podarcis muralis), which differ in orange and yellow pigmentation and in their ecology and behavior, are virtually undifferentiated. Genetic differences are restricted to two small regulatory regions, near genes associated with pterin (SPR) and carotenoid metabolism (BCO2), demonstrating that a core gene in the housekeeping pathway of pterin biosynthesis has been co-opted for bright coloration in reptiles and indicating that these loci exert pleiotropic effects on other aspects of physiology. Pigmentation differences are explained by extremely divergent alleles and haplotype analysis revealed abundant trans-specific allele sharing with other lacertids exhibiting color polymorphisms. The evolution of these conspicuous color ornaments is the result of ancient genetic variation and cross-species hybridization.