Grey horses have an admixture of colored and white hairs over a dark skin. Greying is a process that occurs with ageing so that grey horses are born some other color and eventually look almost white (though they are not genetically white horses, which are actually very rare). The greying gene causes a more or less gradual change in the underlying coat color.
Sometimes people describe grey as being, for example, rose grey, steel grey or dapple grey. Although these may represent accurate descriptions at the time such horses are at a particular stage of the greying process and will change over time. Steel grey horses, for example, may be young grey horses with a black base color. They will change as they mature, perhaps through a phase of dapple grey before going almost white.
The gene which determines whether a horse will be grey has two alleles, which are symbolised G+ and GG. The GG allele is dominant so that grey horses are of genotypes GGGG and G+GG, while G+G+ horses have coats of some other color (non-greys).
Because the grey allele is dominant heterozygous grey horses can have foals of other colors, depending on their genotype for the other color genes.
For example we’ll consider the probability of a grey foal from a grey mare and a chestnut stallion. The chestnut stallion is of genotype G+G+ (i.e. is homozygous for “non grey” alleles). The grey mare had only one grey parent herself and so must be heterozygous for the grey allele, i.e. of genotype G+GG.
The inheritance of grey illustrates epistasis. The GG allele is epistatic (not dominant) to E and e at the extension locus, and to alleles at other horse color genes also. Horses with at least one copy of the allele GG go are grey horses regardless of the genotype at the other genes controlling coat color.
Consider, for example, that we had a grey heterozygous mare and stallion (both of genotype G+GG) who were also heterozygous for the allele e, that causes chestnut when homozygous (i.e. they are therefore both of genotype E+e).
The gametes from each horse would be of four types, any of which are equally likely: G+E+, G+e, GGE+ or GGe. This di-hybrid cross (illustrated below) gives a modified ratio of 12:3:1 (modified from the standard di-hybrid ratio of 9:3:3:1).
Flea-bitten grey horses develop speckles in the original coat color. For example grey horses born chestnut develop chestnut "flea-bites". If this speckling starts soon enough the flea-bites can become quite large and numerous, with the horse developing to look a bit like a leopard spot appaloosa.
"Flea-bites" are thought to be controlled by a separate and probably recessive gene, not linked to the grey gene. It is possible that other colors of horse can have the flea-bitten genotype, but the speckles wouldn't show since they are the same color as the coat!