Phaeomelanin is a common pigment that confers a reddish colour to animals. Since phaeomelanogenesis requires the sulfhydryl group from cysteine or glutathione (GSH), which is an important antioxidant, this pigmentation and the associated coloration may be an honest signal, whereby only high-quality individuals (e.g. with lower oxidative stress) are able to develop showy plumage. The present study tested the mechanisms underlying the honest signal hypothesis using nestling barn swallows, Hirundo rustica gutturalis, which exhibit phaeomelanic throat plumage patches. We examined the relationship between phaeomelanin pigmentation levels and physiological condition during trait development, and the expression of the phaeomelanin-related gene agouti-signalling protein (ASIP) and the GSH-related gene glutathione S-transferase (GST) in throat feather follicles. We found that during phaeomelanogenesis, heavier nestlings produced more pigmented feathers, indicating that nestlings with high phaeomelanin concentrations are in better condition. We also found that phaeomelanin concentration was negatively correlated with total GSH level, but not significantly related with measures of oxidative stress. Among the GST genes, GSTM3 exhibited the highest expression in the developing feathers during phaeomelanogenesis. The expression levels of ASIP were positively associated with the amount of phaeomelanin deposition and negatively associated with the expression of GSTM3, reducing the amount of GSH that was available as an antioxidant. These findings suggest that high-quality individuals produce high concentrations of phaeomelanin in their plumage without experiencing increased oxidative stress, despite phaeomelanin production, which is triggered by ASIP, potentially actively consuming the sulfhydryl group from GSH.