Unlike wild and domestic canaries (Serinus canaria), or any of the three dozen species of finches in genus Serinus, the domestic urucum breed of canaries exhibits bright red bills and legs. This novel trait offers a unique opportunity to understand the mechanisms of bare-part coloration in birds. To identify the mutation producing the colorful phenotype, we resequenced the genome of urucum canaries and performed a range of analyses to search for genotype-to-phenotype associations across the genome. We identified a nonsynonymous mutation in the gene BCO2 (beta-carotene oxygenase 2, also known as BCDO2), an enzyme involved in the cleavage and breakdown of full-length carotenoids into short apocarotenoids. Protein structural models and in vitro functional assays indicate that the urucum mutation abrogates the carotenoid-cleavage activity of BCO2. Consistent with the predicted loss of carotenoid-cleavage activity, urucum canaries tended to have increased levels of full-length carotenoid pigments in bill tissue and reduced levels of carotenoid-cleavage products (apocarotenoids) in retinal tissue compared with other breeds of canaries. We hypothesize that carotenoid-based bare-part coloration might be readily gained, modified, or lost through simple switches in the enzymatic activity or regulation of BCO2 and this gene may be an important mediator in the evolution of bare-part coloration among bird species. © The Author(s) 2020. Published by Oxford University Press on behalf of the Society for Molecular Biology and Evolution. All rights reserved. For permissions, please e-mail: firstname.lastname@example.org.