The design of animal signals is believed to reflect the combined effect of the sensory system of receivers, the type of environment in which communication is being conducted, and the distance signals must travel in that environment. Although empirical studies have examined how each of these factors might separately explain the structure of signals used by animals within species, comparative evidence supporting the predicted interaction of the sensory system, environment and transmission range in the generation of species differences in communication is lacking. I studied the long-range visual displays used by male Caribbean Anolis lizards to advertise territory ownership. The type of movements included in advertisement displays was closely predicted by the motion detection capabilities of the visual system for a given distance and the compounding effects of environmental conditions at the time of display production. Furthermore, the motion detection of Anolis receivers predicted almost precisely the type of movements included in advertisement displays among closely related species from two separate island radiations. My study provides rare comparative evidence illustrating how the sensory system of receivers sets the minimum requirements for what constitutes an effective signal, given the transmission distance of signals, with further variance in signal structure resulting from the environmental conditions occurring at the time of communication.