A composition and method for simultaneously lightening and coloring hair. The composition generally consists of three components, specifically, a bleaching composition, an oxidizing composition and a dyeing composition. The composition preferably lightens hair color by a plurality of levels and simultaneously deposits tones that are attractive and long lasting. In a preferred embodiment, the bleaching composition is a powder composition based on silicate and/or carbonate salts and/or persulfate salts of ammonium, potassium or sodium. The persulfate bleaching composition can be ammonia-free, if desired. The oxidizing composition is preferably an anhydrous hydrogen peroxide solution, or another source of oxygen. The bleaching composition can be mixed with the oxidizing composition to form an anhydrous creme that is applied to the hair.