Summary Animals in the lower mesopelagic zone (600–1,000 m depth) of the oceans have converged on two major strategies for camouflage: transparency and red or black pigmentation [1]. Transparency conveys excellent camouflage under ambient light conditions, greatly reducing the conspicuousness of the animal's silhouette [1, 2]. Transparent tissues are seldom perfectly so, resulting in unavoidable internal light scattering [2]. Under directed light, such as that emitted from photophores thought to function as searchlights [3–8], the scattered light returning to a viewer will be brighter than the background, rendering the animal conspicuous [2, 4]. At depths where bioluminescence becomes the dominant source of light, most animals are pigmented red or black, thereby reflecting little light at wavelengths generally associated with photophore emissions and visual sensitivities [3, 9–14]. However, pigmented animals are susceptible to being detected via their silhouettes [5, 9–11]. Here we show evidence for rapid switching between transparency and pigmentation under changing optical conditions in two mesopelagic cephalopods, Japetella heathi and Onychoteuthis banksii . Reflectance measurements of Japetella show that transparent tissue reflects twice as much light as pigmented tissue under direct light. This is consistent with a dynamic strategy to optimize camouflage under ambient and searchlight conditions.