The Sex-linked orange mutation in domestic cats causes variegated patches of reddish/yellow hair and is a defining signature of random X inactivation in female tortoiseshell and calico cats. Unlike the situation for most coat color genes, there is no apparent homolog for Sex-linked orange in other mammals. We show that Sex-linked orange is caused by a 5-kb deletion that leads to ectopic and melanocyte-specific expression of the Rho GTPase Activating Protein 36 (Arhgap36) gene. Single-cell RNA sequencing (RNA-seq) studies from fetal cat skin reveal that red/yellow hair color is caused by reduced expression of melanogenic genes that are normally activated by the melanocortin 1 receptor (Mc1r)-cyclic adenosine monophosphate (cAMP)-protein kinase A (PKA) pathway, but Mc1r and its ability to stimulate cAMP accumulation is intact. Instead, we show that expression of Arhgap36 in melanocytes leads to reduced levels of the PKA catalytic subunit (PKA