No one knows how squids can change color!

Perhaps no animal is better at adapting to color and camouflage than the squid. Their skin’s iridescence, which is it's light-reflecting property, is responsible for the range of rainbow-like colors they display.

However, just how they do this is still unknown! It is believed that the nerves in the squid’s skin control the range of colors they are able to display, which vary from red to blue at any given time.

Within the skin, one set of nerves, which are actually organs, create patterns of yellow, red, and brown.

Under these colors, cells in the skin help reflect light and add blue, green, and pink. Together they create a majestic and hypnotic sight! But no matter how impressive, humans cannot figure out how they do it!

(Source)