The research, published in the journal Science, compared the structures which determine colour in living bird feathers with those in the fossil.
"This would be a very striking animal if it was alive today," said Yale University's Professor Richard Prum, co-author of the report.
It is believed the colours would have helped the dinosaur attract a mate.
Anchiornis huxleyi is a four-winged dinosaur which lived in the late Jurassic Period in China. Researchers chose this particular fossil to work on because the feathers were so well preserved.