The genus Xiphophorus has great potential to contribute to the study of vertebrate pigmentation and elucidating the relative influence of ecology, physiology, and behavior on evolution at the molecular level. More importantly, the association between pigmentation and a functional oncogene offers the potential to understand the evolution and maintenance of cancer-causing genetic elements. Using criteria laid out recently in the literature, I demonstrate the power of the Xiphophorus system for studying pigment evolution through integrative organismal biology. Using the most recent phylogeny, the phylogenetic distribution of several important pigmentation loci are reevaluated. I then review support for existing hypotheses of the functional importance of pigmentation. Finally, new observations and hypotheses regarding some of the characteristics of pigment patterns in natural populations and open questions and future directions in the study of the evolution of these traits are discussed.