A population of rainbow lizards (Agama agama) was studied in central Kenya. Rainbow lizards are able to rapidly change their colours. Dominant territorial males usually exhibited intensive bright colours. Dominant males were less intensively coloured when close to their territory border than in its center. Dominant males tolerated subordinate adult males in their territories. The colours of subordinate adult males were less intensive when these males were close to dominant males than when far from them. We interpret our findings in light of theories of sexual selection.