Squid display impressive changes in body coloration that are afforded by two types of dynamic skin elements: structural iridophores (which produce iridescence) and pigmented chromatophores. Both color elements are neurally controlled, but nothing is known about the iridescence circuit, or the environmental cues, that elicit iridescence expression. To tackle this knowledge gap, we performed denervation, electrical stimulation and behavioral experiments using the long-fin squid, Doryteuthis pealeii. We show that while the pigmentary and iridescence circuits originate in the brain, they are wired differently in the periphery: (1) the iridescence signals are routed through a peripheral center called the stellate ganglion and (2) the iridescence motor neurons likely originate within this ganglion (as revealed by nerve fluorescence dye fills). Cutting the inputs to the stellate ganglion that descend from the brain shifts highly reflective iridophores into a transparent state. Taken together, these findings suggest that although brain commands are necessary for expression of iridescence, integration with peripheral information in the stellate ganglion could modulate the final output. We also demonstrate that squid change their iridescence brightness in response to environmental luminance; such changes are robust but slow (minutes to hours). The squid's ability to alter its iridescence levels may improve camouflage under different lighting intensities.