The processes responsible for reddening of Continental Red Beds (CRBs) and the relationship between colour variation and paleoenvironmental conditions are presented focusing on a comprehensive multi-proxy study of Permian sediments in the Bohemian Massif, Czechia. The investigation incorporates facies analysis, quantitative colour assessment using diffuse Vis-spectral reflectance (DRS), optical and electron microprobe microscopy, bulk-rock (XRF and XRD), and in-situ geochemistry (laser-ablation ICP-MS). Results indicate a progressive drying trend from the Cisuralian to Guadalupian series in studied continental red sediments. Different facies indicate the change of the sedimentary environment from a deep lacustrine environment (lower part of Rudník Member, Cisuralian) to a fluvial floodplain and eolian environment (Trutnov Formation, Guadalupian). Examination of the three major categories (white, grey-green and red sediments) identified in the studied continental red beds indicate that diagenetic alteration of clay minerals and biotite were the main source of iron fuelling the growth of hematite responsible for their red colour. Early diagenetic processes and paleoenvironmental conditions, particularly the oxidizing or reducing conditions play a key role in the red sediment formation. It is suggested that later diagenetic stages are incapable of colouring non-red, iron-rich sediments formed in deep anoxic lacustrine environments. Microbial activities and reducing fluids have been identified as the main factors in the formation of grey-green sediments forming distinct reduction zones. The reduction spots formed during the early stages of diagenesis (eodiagenesis), and they were likely never red. In contrast, reduction strips, initially exhibiting a red hue, underwent a colour change during more advanced stages of diagenesis (mesodiagenesis).