Fishes have diverse pigment patterns, yet mechanisms of pattern evolution remain poorly understood. In zebrafish, Danio rerio, pigment-cell autonomous interactions generate dark stripes of melanophores that alternate with light interstripes of xanthophores and iridophores. Here, we identify mechanisms underlying the evolution of a uniform pattern in D. albolineatus in which all three pigment cell classes are intermingled. We show that in this species xanthophores differentiate precociously over a wider area, and that cis regulatory evolution has increased expression of xanthogenic Colony Stimulating Factor-1 (Csf1). Expressing Csf1 similarly in D. rerio has cascading effects, driving the intermingling of all three pigment cell classes and resulting in the loss of stripes, as in D. albolineatus. Our results identify novel mechanisms of pattern development and illustrate how pattern diversity can be generated when a core network of pigment-cell autonomous interactions is coupled with changes in pigment cell differentiation.