Here’s our own attempt to clear it up by experiment.
Human vision is affected by ‘color constancy’ – thats why when we’re indoors things look natural, but a camera sometimes sees it as ‘yellow,’ and when we’re outdoors we see a natural scene, but the camera sometimes sees it as ‘blue’.
Add both a blue and a yellow light source and the camera will capture both yellow and blue tints – like the foreground and background of the dress picture.
Thanks to our tendency towards seeing color constancy, some people’s visual systems assume there is only one color light source (when there are actually two). Some people will correct towards a daylight light source – the dress looks yellow and white – and some will correct towards an indoors light source, so the dress looks blue and black.
Here’s a video to illustrate the illusion in action:
The elephant silhouette stays the same color throughout the video; it’s a combination of blue and yellow tones (like the dress). When the elephant is up against a blue background (i.e. like daylight lighting) it appears strongly yellow and when it’s up against a yellow background (i.e. like it’s being illuminated by indoors lighting) it appears strongly blue.
Find some more mind-bending optical illusions from the Flickr community here.