Aim: Animal coloration is expected to differ between populations in different habitats according to Gloger's rule, with darker animals found in more humid, vegetated or warmer environments. Yet despite considerable support across the globe, the mechanisms behind this biogeographical rule are currently still unclear. Exploiting a ring species with plumage coloration from crimson to pale yellow, we test Gloger's rule and the mechanisms behind phenotypic divergence. Location: South-eastern Australia. Major taxa studied: Crimson rosellas (Platycercus elegans). Methods: We combined three modelling approaches (spatial regression; random decision forest species distribution and conditional inference tree) to test the association between 10 environmental variables (based on long-term climate data and remotely sensed reflectance of the land) and plumage coloration across the distribution of P. elegans. We also took in-situ measurements of background coloration of dominant vegetation to examine the relationship between (a) background coloration measured locally and remotely, (b) P. elegans coloration and (c) known differences in visual sensitivity of the subspecies using species-specific visual models. Results: On both a continental and a local scale, the distribution of yellow-red plumage coloration was strongly predicted by average rainfall, summer temperature and the Earth's reflectance between 620–670 nm. Remotely sensed radiance measures correlated strongly and positively with reflectance of the leaves of the dominant tree species at sites across the P. elegans distribution. Visual modelling indicated that differences in background colour could affect signalling efficacy in dim-light conditions. Main conclusions: Our study shows that the highly variable plumage coloration conforms to Gloger's rule, and indicates that background coloration of the vegetation and thermoregulation are likely to be important mechanisms. Our results also show that Gloger's rule can explain variation in pigmentary systems other than melanin, and highlight that selection from environmental variation could be an important force behind the geographic diversity found in ring species.