You might have noticed that there are other words with the same duality of spelling—words like “honor,” “traveling,” “favorite,” and the past tense of the verb “spell.” These variations in spelling exist because of differences between American English and British English. Color is the spelling used in the United States. Colour is used in other English-speaking countries.
The word color has its roots (unsurprisingly) in the Latin word color. It entered Middle English through the Anglo-Norman colur, which was a version of the Old French colour. The current difference in spelling between the American and British variants is credited to (or occasionally blamed on) Noah Webster, the American lexicographer. Seeking to establish American independence and identity in language, Webster implemented a number of spelling reforms in A Compendious Dictionary of the English Language, which he published in 1806.