Neanderthals had Arg307Gly MC1R variant reducing receptor activity and cell surface expression. This Neanderthal variant never detected in modern human populations. Reduced MC1R function causes fair skin and red hair phenotypes in humans. Neanderthal MC1R supports no substantial gene flow into modern humans. Fair skin alleles provided survival advantages in Europe. MC1R loss-of-function mutations produce light pigmentation across mammals and birds. Convergent evolution at MC1R drives similar color changes in unrelated species. SLC24A5 and KITLG mutations cause lighter skin in humans and fish. Modern humans evolved lighter skin independently via multiple genes after out-of-Africa migration. Neanderthal pigmentation variant suggests selection for reduced melanin in low-UV Europe. MC1R variants alter pain responses potentially aiding territorial fights. Neanderthals likely had pale skin despite African origins of early hominids. Genetic divergence at MC1R underscores Neanderthal-modern human differences. Transfection studies confirm Neanderthal MC1R impairs G-protein signaling. Pigmentation genes identified in animals directly explain human skin color variation.