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Abstract Background Nellore cattle (Bos indicus) are well-known for their adaptation to warm and humid environments. Hair length and coat color may impact heat tolerance. The Nellore breed has been strongly selected for white coat, but bulls generally exhibit darker hair ranging from light grey to black on the head, neck, hump, and knees. Given the potential contribution of coat color variation to the adaptation of cattle populations to tropical and sub-tropical environments, our aim was to map positional and functional candidate genetic variants associated with darkness of hair coat (DHC) in Nellore bulls. Results We performed a genome-wide association study (GWAS) for DHC using data from 432 Nellore bulls that were genotyped for more than 777 k single nucleotide polymorphism (SNP) markers. A single major association signal was detected in the vicinity of the agouti signaling protein gene (ASIP). The analysis of whole-genome sequence (WGS) data from 21 bulls revealed functional variants that are associated with DHC, including a structural rearrangement involving ASIP (ASIP-SV1). We further characterized this structural variant using Oxford Nanopore sequencing data from 13 Australian Brahman heifers, which share ancestry with Nellore cattle; we found that this variant originates from a 1155-bp deletion followed by an insertion of a transposable element of more than 150 bp that may impact the recruitment of ASIP non-coding exons. Conclusions Our results indicate that the variant ASIP sequence causes darker coat pigmentation on specific parts of the body, most likely through a decreased expression of ASIP and consequently an increased production of eumelanin.