Although the 1,3-bis(4-aminoaryl)squaraines showed no pH-induced colour change behaviour, they were found to undergo reduction with sodium borohydride in solution to give colourless leuco compounds, which oxidised readily in air back to the coloured squaraine dye. This colour-change redox behaviour has potential in the area of peroxidase-based bioassays. The structures of the leuco compounds were investigated in some detail. Thus the hydroxy group could be (a) methylated with diazomethane to form O-methyl leuco compounds, (b) acetylated with acetic anhydride to give O-acetyl derivatives, and (c) reacted with phosphorous oxychloride or thionyl chloride to give chloro-leuco derivatives. The susceptibility of the chorine atom towards nucleophilic substitution in the last group of compounds was demonstrated by their facile reaction with alkylamines to give amino-leuco squaraines. The enolic nature of the hydroxy group also enabled a glycoside and a phosphate ester derivative to be made, which were of potential interest as chromogenic substrates for glycosidase and phosphatase enzymes respectively.