The modification of transcriptional regulation has become increasingly appreciated as a major contributor to morphological evolution. However, the role of negative-acting control elements (e.g. silencers) in generating morphological diversity has been generally overlooked relative to positive-acting “enhancer” elements. The highly variable body coloration patterns among Drosophilid insects represents a powerful model system in which the molecular alterations that underlie phenotypic diversity can be defined. In a survey of pigment phenotypes among geographically disparate Japanese populations of Drosophila auraria, we discovered a remarkable degree of variation in male-specific abdominal coloration. In testing the expression patterns of the major pigment-producing enzymes, we found that phenotypes uniquely correlated with differences in the expression of ebony, a gene required for yellow-colored cuticle. Assays of ebony’s transcriptional control region indicated that a lightly pigmented strain harbored cis-regulatory mutations that caused correlated changes in its expression. Through a series of chimeric reporter constructs between light and dark strain alleles, we localized function-altering mutations to a conserved silencer that mediates a male-specific pattern of ebony repression. This suggests that the light allele was derived through the loss of this silencer’s activity. Furthermore, examination of the ebony gene of D. serrata, a close relative of D. auraria which secondarily lost male-specific pigmentation revealed the parallel loss of this silencer element. These results demonstrate how loss-of-function mutations in a silencer element resulted in increased gene expression. We propose that the mutational inactivation of silencer elements may represent a favored path to evolve gene expression, impacting morphological traits.