The white spotting locus (S) in dogs is colocalized with the MITF (microphtalmia-associated transcription factor) gene. The phenotypic effects of the four S alleles range from solid colour (S) to extreme white spotting (s(w)). We have investigated four candidate mutations associated with the s(w) allele, a SINE insertion, a SNP at a conserved site and a simple repeat polymorphism all associated with the MITF-M promoter as well as a 12 base pair deletion in exon 1B. The variants associated with white spotting at all four loci were also found among wolves and we conclude that none of these could be a sole causal mutation, at least not for extreme white spotting. We propose that the three canine white spotting alleles are not caused by three independent mutations but represent haplotype effects due to different combinations of causal polymorphisms. The simple repeat polymorphism showed extensive diversity both in dogs and wolves, and allele-sharing was common between wolves and white spotted dogs but was non-existent between solid and spotted dogs as well as between wolves and solid dogs. This finding was unexpected as Solid is assumed to be the wild-type allele. The data indicate that the simple repeat polymorphism has been a target for selection during dog domestication and breed formation. We also evaluated the significance of the three MITF-M associated polymorphisms with a Luciferase assay, and found conclusive evidence that the simple repeat polymorphism affects promoter activity. Three alleles associated with white spotting gave consistently lower promoter activity compared with the allele associated with solid colour. We propose that the simple repeat polymorphism affects cooperativity between transcription factors binding on either flanking sides of the repeat. Thus, both genetic and functional evidence show that the simple repeat polymorphism is a key regulator of white spotting in dogs.