In mammals, >100 genes regulate pigmentation by means of a wide variety of developmental, cellular, and enzymatic mechanisms. Nevertheless, genes that directly regulate pheomelanin production have not been described. Here, we demonstrate that the subtle gray (sut) mouse pigmentation mutant arose by means of a mutation in the Slc7a11 gene, encoding the plasma membrane cystine/glutamate exchanger xCT [Kanai, Y. & Endou, H. (2001) Curr. Drug Metab. 2, 339-354]. A resulting low rate of extracellular cystine transport into sut melanocytes reduces pheomelanin production. We show that Slc7a11 is a major genetic regulator of pheomelanin pigment in hair and melanocytes, with minimal or no effects on eumelanin. Furthermore, transport of cystine by xCT is critical for normal proliferation, glutathione production, and protection from oxidative stress in cultured cells. Thus, we have found that the Slc7a11 gene controls the production of pheomelanin pigment directly. Cells from sut mice provide a model for oxidative stress-related diseases and their therapies.