We use a sample of 69726 galaxies from the SDSS to study the variation of the bimodal color-magnitude ( CM ) distribution with environment . Dividing the galaxy population by environment ( \Sigma _ { 5 } ) and luminosity ( -23 < M _ { r } < -17 ) , the u - r color functions are modeled using double-Gaussian functions . This enables a deconvolution of the CM distributions into two populations : red and blue sequences . The changes with increasing environmental density can be separated into two effects : a large increase in the fraction of galaxies in the red distribution , and a small color shift in the CM relations of each distribution . The average color shifts are 0.05 \pm 0.01 and 0.11 \pm 0.02 for the red and blue distributions , respectively , over a factor of 100 in projected neighbor density . The red fraction varies between about 0 % and 70 % for low-luminosity galaxies and between about 50 % and 90 % for high-luminosity galaxies . This difference is also shown by the variation of the luminosity functions with environment . We demonstrate that the effects of environment and luminosity can be unified . A combined quantity , \Sigma _ { mod } = ( \Sigma _ { 5 } / { Mpc } ^ { -2 } ) + ( L _ { r } / L _ { -20.2 } ) , predicts the fraction of red galaxies , which may be related to the probability of transformation events . Our results are consistent with major interactions ( mergers and/or harassment ) causing galaxies to transform from the blue to the red distribution . We discuss this and other implications for galaxy evolution from earlier results and model the effect of slow transformations on the color functions . Article written 2004 August 16th . Refs . updated 2004 October 25th . To appear in AIP Proc. , The New Cosmology , eds . R. E. Allen et al .