Offspring ornamentation typically occurs in taxa with parental care, suggesting that selection arising from social interactions between parents and offspring may underlie signal evolution. American coot babies are among the most ornamented offspring found in nature, sporting vividly orange-red natal plumage, a bright red beak, and other red parts around the face and pate. Previous plumage manipulation experiments showed that ornamented plumage is favored by strong parental choice for chicks with more extreme ornamentation but left unresolved the question as to why parents show the preference. Here we explore natural patterns of variation in coot chick plumage color, both within and between families, to understand the context of parental preference and to determine whose fitness interests are served by the ornamentation. Conspecific brood parasitism is common in coots and brood parasitic chicks could manipulate hosts by tapping into parental choice for ornamented chicks. However, counter to expectation, parasitic chicks were duller (less red) than nonparasitic chicks. This pattern is explained by color variation within families: Chick coloration increases with position in the egg-laying order, but parasitic eggs are usually the first eggs a female lays. Maternal effects influence chick coloration, but coot females do not use this mechanism to benefit the chicks they lay as parasites. However, within families, chick coloration predicts whether chicks become "favorites" when parents begin control over food distribution, implicating a role for the chick ornamentation in the parental life-history strategy, perhaps as a reliable signal of a chick's size or age.