In the wild, there are a number of environmental factors which cause coral bleaching (loss of color). In home reef aquariums however, the usual cause of fading coral colors is a change in lighting. Most frequently, reef keepers observe coral bleaching with newly obtained corals.

Color Changes in New Corals
Changes in the coloration of newly introduced corals are not always due to sick corals. They are most likely due to changes in lighting. Corals endure a lot of stress during shipping. Even a short trip from one environment to another, where the water and lighting are, in all likelihood quite different, can provoke the coral into ejecting zooxanthellae cells or changing their chlorophyll content.
There are several ways in which light affects the appearance of corals.
Light Spectrum (Kelvin Rating)
The light spectrum (Kelvin Rating) of light affects the color of corals:
  • Lower Kelvin (more yellow light), warmer color.
  • "Daylight" (6500K) fluorescent bulbs produce light equivilent to noon at the equator.
  • Higher Kelvin produces more white to blue light.
  • Actinic (higher in the spectrum) lights produce more colors.

Light Intensity
Photosynthetic corals obtain their food and colors from the resident zooxanthellae cells on their surfaces. Corals can increase or decrease the number of zooxanthellae cells in response to the amount of light which reaches the coral. Zooxanthellae cells produce chlorophyll, which reacts with light to produce food for the coral and pigment for protection.
A byproduct of chlorophyll's reaction to light is oxygen. While corals require oxygen to live, too much O2 is toxic so they adjust the number of Zooxanthellae cells. Zooxanthellae cells are yellow to brown in color, so more light produces browner corals.
UV Light
Corals are very sensitive to UV-A & UV-B light, which can destroy their DNA and RNA. Corals produce colored pigments (blue, purple, pink) in their zooxanthellae cells for protection from the UV light.
In nature, UV rays are filtered out by ocean water. The deeper the water, the more UV rays are filtered out of the spectrum. Since corals produce these colorful pigments as a protection from the UV rays striking them, shallow water corals have more colors: More UV, more color; Less UV, less color.
MH lights are high in UV light, which is why they are best used over glass aquarium canopies, which filter out most of the harmful UV light rays.
Acclimating New CoralsNew corals do best if they are slowly acclimated to their new lighting. Placing the new coral in an area of less light for a time, then gradually moving it to more light will allow the corals to adjust their zooxanthellae cell density and their production of chlorophyll.