Horses have only three base colours: Bay, Black or Chestnut.

These different colours are controlled by 2 loci, the Extension (Red/Black) and Agouti.

The Extension locus controls the production of black or red pigment throughout the coat. The allele for black colour (E) is dominant over the red allele (e), so a horse only needs one copy of the black allele to appear black-based. But if the horse has two alleles (e/e) he will appear Chestnut.

The Agouti locus can then modify black pigment by pushing it to the horse's points, creating a Bay. The Agouti A allele is dominant, so a black pigmented horse only needs one copy (heterozygous) of the A allele to appear Bay. The Agouti (a) allele is recessive, thus, a horse needs two copies (homozygous) of the recessive allele (a) at the Agouti locus to appear Black.

Agouti has no effect on red pigment, but the red allele (e) is dominant over the (a) allele. This means a Chestnut horse (e/e) can carry one or two copies of the Agouti recessive (a) allele and will look no different from chestnut horses with Agouti dominant alleles (e/e a/a, e/e A/a, e/e A/A).