Chameleon owner here.
Their colors brighten when they are relaxed and feel safe (also when asleep) and they darken when they feel stressed or threatened. Some species have distinctive features that show up (like a bright yellow line or completely new pattern) based on whether theyre being territorial, or receptive to breeding.
As many have stated it’s a method of communication primarily. Like a dog’s tail and facial expressions with a bit more pizazz.
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