The Dominant White locus (W) in the domestic cat demonstrates pleiotropic effects exhibiting complete penetrance for absence of coat pigmentation and incomplete penetrance for deafness and iris hypopigmentation. We performed linkage analysis using a pedigree segregating White to identify KIT (Chr. B1) as the feline W locus. Segregation and sequence analysis of the KIT gene in two pedigrees (P1 and P2) revealed the remarkable retrotransposition and evolution of a feline endogenous retrovirus (FERV1) as responsible for two distinct phenotypes of the W locus, Dominant White, and white spotting. A full-length (7125 bp) FERV1 element is associated with white spotting, whereas a FERV1 long terminal repeat (LTR) is associated with all Dominant White individuals. For purposes of statistical analysis, the alternatives of wild-type sequence, FERV1 element, and LTR-only define a triallelic marker. Taking into account pedigree relationships, deafness is genetically linked and associated with this marker; estimated P values for association are in the range of 0.007 to 0.10. The retrotransposition interrupts a DNAase I hypersensitive site in KIT intron 1 that is highly conserved across mammals and was previously demonstrated to regulate temporal and tissue-specific expression of KIT in murine hematopoietic and melanocytic cells. A large-population genetic survey of cats (n = 270), representing 30 cat breeds, supports our findings and demonstrates statistical significance of the FERV1 LTR and full-length element with Dominant White/blue iris (P < 0.0001) and white spotting (P < 0.0001), respectively.