A mathematical model of multiple layer skin coloration in cephalopods, a class of aquatic animals, is presented. The model incorporates diffuse and specular reflection from both pigment and structural photonic components found in the skin of these animals. Specific physical processes of this coloration are identified and modeled utilizing available biological materials data. Several examples of combination spectra are calculated to illustrate multiple layer and incident light effects as well as the potentially rich repertoire of color schemes available to these animals. A detailed understanding of the physical principles underlying cephalopod coloration is expected to yield insights into their possible functions.