All horses are either Black or Red (Sorrel/chesnut). All other colors are caused by modifying genes. A horse can carry any number of modifying genes. I like to think of it like layers of paint or stain. If you start with a Black horse and add Agouti gene you get Bay, add dun and you have a Bay Dun (also commonly referred to as dun), add cream and you have a dunskin, add roan and you have a dunskin roan add tobiano and you have a tobiano dunskin roan, add overo and you have a tovero dunskin roan.

Agouti - causes bay on a black horse, but does not modify the color on a red (sorrel) horse. However a sorrel horse that carries the Agouti gene can produce a bay when crossed with a black or black based horse.

Cream - causes

Palomino on a red/sorrel horse;

Buckskin on a bay horse;

Smokey Black on a Black Horse (Does not affect the appearance of the color of a Black horse.)

Smokey Cream on a Smokey Black horse with 2 cream genes

Perlino on a Buckskin horse with 2 cream genes

Cremello on a Palomino horse with 2 cream genes

Ivory on a horse that carries the Cream and Champagne genes

Dun - (a dorsal stripe running down their back) causes

Red Dun on a red/sorrel horse;

Dun aka Bay Dun on a Bay horse;

Grulla on a Black horse.

Roan - causes

Red Roan on a red/sorrel horse;

Bay Roan on a Bay Horse;

Blue Roan on a Black horse.

The above list includes only some of the modifying factors

Each cell is composed of a gene pair that contain similar information. A parent passes only one of the genes from each pair to its offspring.

Some genes are Recessive - meaning that the horse may carry and produce it but may not look it. (i.e. Red/Sorrel/Chesnut) This explains why you can cross two black horses and still get a sorrel foal.

Some genes are Dominate meaning that a horse that has it will always express it visibly (exceptions would be cream on black and Agouti on red) and the trait can never be produced unless at least one parent has it.

Some dominate genes are Black, Grey, Cream, Champagne, Agouti, Dun, Roan, Tobiano. (Overo was thought to be recessive but is now thought to be dominate but more complicated.)

Homozygous - is when a horse carries 2 same genes for that trait and all offspring of this horse will express that trait regardless of what it is bred to. (Overo and Roan are thought to be lethal in the homozygous form in that a foal that is homozygous for either of these traits will die before or shortly after birth).

Heterozygous - is when a horse carries 2 genes for that trait that are dissimilar and thus the offspring of this horse will express the trait 50% of the time. (Non-homozygous)

Please note that Genetics is a Scientific Theory. I am not an expert in genetics and am only presenting this information in an attempt to help you understand color in horses more fully from a laymans perspective. Also the information presented herein is by no means complete.