Dye

Wool dyes are items used to change the color of wool. They were added in the beta 1.2 update. There are seven "primary" dyes (red, yellow, blue, green, white, black and brown) and nine "secondary" dyes.

Uses
Dyes can be placed with wool on a crafting table (in any position) to dye a single block. It can also be used on sheep to paint them. After shearing, the wool dropped will be of the painted color as well, possibly yielding more coloured wool than from crafting. Additionally, there are naturally occurring gray, light gray and black sheep that drop corresponding color wool as well.

Data Values
The color of the item depends on the damage value it is set to.