The melanocortin 1 receptor (MC1R) regulates pigmentation in humans and other vertebrates. Variants of MC1R with reduced function are associated with pale skin color and red hair in humans of primarily European origin. We amplified and sequenced a fragment of the MC1R gene (mc1r) from two Neanderthal remains. Both specimens have a mutation that was not found in ~3700 modern humans analyzed. Functional analyses show that this variant reduces MC1R activity to a level that alters hair and/or skin pigmentation in humans. The impaired activity of this variant suggests that Neanderthals varied in pigmentation levels, potentially on the scale observed in modern humans. Our data suggest that inactive MC1R variants evolved independently in both modern humans and Neanderthals.