Many terrestrial ectotherms are capable of rapid color change, yet it is unclear how these animals accommodate the multiple functions of color, particularly camouflage, communication and thermoregulation. Thermal benefits of color change depend on an animal’s absorptance of solar energy in both visible and near infrared (NIR) wavelengths, yet research has focused almost exclusively on the former. Here, we show that wild-caught bearded dragon lizards (Pogona vitticeps) exhibit substantial UV-visible and NIR skin reflectance change in response to both background colour and temperature, both in the laboratory and in the wild. Biophysical models of heat transfer confirmed a significant potential thermal benefit of colour change. In the laboratory, lizards changed colour exclusively on their dorsal body regions in response to temperature; but both dorsally and ventrally in response to social interactions. Furthermore, in the wild, background colour explained much more of the observed variation in the colour of lizards than did body temperature. Thus bearded dragons are able to partition dorsal and ventral colour change to accommodate the competing requirements of thermoregulation and signalling respectively; but may prioritise camouflage over thermoregulatory requirements in the case of dorsal coloration, particularly if there is a conflict between the two. Lastly, we found that the relationship between UV-visible and NIR reflectance change varied substantially within and between individuals, particularly in response to temperature. This raises the intriguing possibility of adaptive modulation of NIR reflectance, as a consequence of trade-offs between thermoregulation and signalling or camouflage.