Transmission fluid normally ranges in color from a bright to a dark translucent red color. The color alone is not an indication of a transmission issue or that the transmission fluid needs to be changed, according to AGCO Automotive Repair. Transmission fluid becomes darker as it ages or is heated.

Transmission fluid that is excessively dirty or black in color signifies transmission issues. Changing it does not fix the problem. Transmission fluid that looks burnt is the result of a slipping clutch, failing torque converter or issues with the solenoids, according to AGCO Automotive Repair. Water in transmission fluid signals a leak in the radiator. This requires an immediate fix to avoid rust and expensive automotive issues.