The coloration mechanism of Xiuyan Jade was studied with the chemical composition, valance and coordination states of transition metal ions. The result of inductively-coupled plasma atom emission spectrometer (ICP-AES) indicated that there are little other transition metal elements except for iron and manganese. Electron paramagnetic resonance (EPR) revealed that Fe3+ ions locate at both octahedral sites and tetrahedral sites. Optical absorption spectrum (OAS) showed the presence of Fe2+ and Fe3+ ions. Moreover, depending on the results of OAS, Fe2+ ions determine the green color of Xiuyan Jade, while the coexistence of Fe3+ and Fe2+ ions introduces the yellow color of Xiuyan Jade. The chromaticity coordinate was calculated according to diffuse reflectance spectrum. The result demonstrated that chromaticity coordinates can be used to quantitatively distinguish Xiuyan Jade with similar color, which can provide a scientific reference for the evaluation of the value of Xiuyan Jade.