The discoloration illusion, a new visual phenomenon, is described. This phenomenon originates from the juxtaposition of eight chromatic parallel contours on a white background, creating a luminance gradient and enclosing a light red region. Under these conditions, the inner region appears white: the light red discolors and appears white with both surface color and luminous qualities. In two experiments, the discoloration illusion was (i) compared with the coloration effect of the watercolor illusion, obtained when the number of adjacent contours was reduced to at least two, and (ii) tested under several conditions useful for understanding the roles of the luminance gradient profile. The results suggest that discoloration is not a lightness illusion and does not depend on simultaneous contrast or on achromatic mechanisms, but more likely on chromatic mechanisms that, through the luminance chromatic gradient, provide cues about the interactions of light and surface and model the volume by depicting lights and shades. The discoloration illusion suggests a possible neural scenario where multiple juxtaposed contours may stimulate neurons, selective for different asymmetric luminance profiles and signaling not only the unilateral belongingness of the boundaries and the coloration effect but also the volumetric and the illumination effects.