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The Color Computer, or CoCo to its fans, was Tandy/Radio Shack's first microcomputer not limited to a black-and-white display. When it debuted in June 1980, the TRS-80 Color Computer was the cheapest home computer that could display multiple colors, until the Commodore VIC 20 came out the next year. Its output was designed to be shown on an ordinary color TV set.

The original Color Computer came in a silver case with a built-in chiclet keyboard, similar to the TRS 80 Model I. However, despite the use of the "TRS-80" name (which Tandy phased out later in the 1980s), the CoCo was completely incompatible with software written for other TRS 80 models.* Like many other microcomputers of the time, the CoCo could only handle uppercase letters. Graphics on the CoCo were limited to two predefined four-color palettes, one of which had neither black nor white. The CoCo's Motorola 6809E CPU was underclocked, running slowly even by 1980 standards.

The CoCo's first two models went through several revisions each. The final model, the Color Computer 3, was introduced in 1986. The CoCo 3 had significantly expanded memory and could output high-resolution graphics (up to 16 simultaneous colors) or mixed-case text to a monitor. But by then the CoCo was in decline, and IBM Personal Computer clones such as the Tandy 1000 were becoming more popular as home computers. The CoCo still remained in production until 1991.