Color polymorphic species can offer exceptional insight into the ecology and genetics of adaptation. Although the genetic architecture of animal coloration is diverse, many color polymorphisms are associated with large structural variants and maintained by biotic interactions. Grasshoppers are notably polymorphic in both color and karyotype, which makes them excellent models for understanding the ecological drivers and genetic underpinnings of color variation. Banded and uniform morphs of the desert clicker grasshopper (Ligurotettix coquilletti) are found across the western deserts of North America. To address the hypothesis that predation maintains local color polymorphism and shapes regional crypsis variation, we surveyed morph frequencies and tested for covariation with two predation environments. Morphs coexisted at intermediate frequencies at most sites, consistent with local balancing selection. Morph frequencies covaried with the appearance of desert substrate-an environment used only by females-suggesting that ground-foraging predators are major agents of selection on crypsis. We next addressed the hypothesized link between morph variation and genome structure. To do so, we designed an approach for detecting inversions and indels using only RADseq data. The banded morph was perfectly correlated with a large putative indel. Remarkably, indel dominance differed among populations, a rare example of dominance evolution in nature.