The development of voiced sibilants is a long-standing puzzle in Indo-Iranian historical phonology. In Vedic, all voiced sibilants are lost from the system, but the details of this loss are complex and subject to debate. The most intriguing development concerns the word-final -ah. to -o in sandhi. This paper presents a new account of the development of voiced sibilants from the Proto-Indo-Iranian period to Vedic with a special emphasis on Iranian comparative data. I propose a new explanation for the peculiar development of word-final voiced fricatives and motivate the new proposal with a phonetic explanation. I argue that *-s lenited and voiced to *-ɦ word-finally which colors the preceding short vowel a ̆ to *ɔ (o). Word-internally, no debuccalization occurs. Voiced dental fricative *z colors the preceding a-vowel to *ɛ (e). The voiced retroflex fricative *ẓ, on the other hand, causes no coloring. Voiced fricatives thus color the preceding vowels with respect to their place of articulation. Dental fricatives cause fronting, while breathiness causes backing, which is supported by typological data. This proposals explains several unusual aspects of Vedic and Avestan data.