The molecular background of many loci affecting coat colour inheritance in cattle is still incompletely characterized, although it is known that coat colour results from the joint effects of several loci, e.g. agouti, extension and dilution. Dilution alleles are responsible for a dilution effect on the original coat colour of an individual, which is determined by the agouti and extension loci. Different loci affecting dilution of pigment are suggested in Charolais (Dc) and Simmental (Ds). To enable chromosomal mapping of the Dc mutation, 133 animals from an F2 full-sib resource population generated from a cross of Charolais and German Holstein were scored for the coat colour dilution phenotype. Linkage analysis covering all autosomes revealed a significant linkage of the dilution phenotype with microsatellite markers on bovine chromosome 5. No recombination was observed between marker ETH10 and the Dc locus. Positional and functional information identified the bovine silver homolog (SILV) gene as a candidate for the Dc mutation. Results from comparative sequencing of the SILV gene in individuals with different dilution coat colour phenotypes confirmed the presence of a c.64G>A non-synonymous mutation, which had previously been identified in the Charolais breed. The alleles at this locus were associated with coat colour dilution in this study. However, further investigation of colour inheritance within the F2 resource population indicated that a single diallelic mutation in the SILV gene cannot explain the total observed variation of coat colour dilution.