Red hair in humans is associated with variant alleles of the αMSH receptor gene, MC1R. Loss of MC1R function in other mammals results in red or yellow hair pigmentation. We show that a mouse bacterial artificial chromosome (BAC) which contains Mc1r will efficiently rescue loss of Mc1r in transgenic mice, and that overexpression of the receptor suppresses the effect of the endogenous antagonist, agouti protein. We engineered the BAC to replace the mouse coding region with the human MC1R sequence and used this in the transgenic assay. The human receptor also efficiently rescued Mc1r deficiency, and in addition, appeared to be completely resistant to the effects of agouti, suggesting agouti protein may not play a role in human pigmentary variation. Three human variant alleles account for 60% of all cases of red hair. We engineered each of these in turn into the BAC and find that they have reduced, but not completely absent, function in transgenic mice. Comparison of the phenotypes of αMSH-deficient mice and humans in conjunction with this data suggests that red hair may not be the null phenotype of MC1R.