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Settings → Appearance → Theme — or Change Theme… in the command palette — opens the theme picker.

Built in

The tty7 theme picker

Placeholder — screenshot: the theme picker with light and dark sections

Following the system

Turn on Sync with system and pick a theme for each appearance. tty7 follows the OS live — no restart, no reload.

Legible bright colours

Some palettes put a bright ANSI colour so close to their own background that it disappears. Legible bright colors (on by default) brightens or darkens those just enough to be readable. Turn it off with theme_legible_palette: false if you want the palette exactly as authored.

Transparency

Settings → Appearance → Transparency:

Writing your own

Open themes folder in Settings takes you to: Drop a .yaml file in and it appears in the picker. The file name is the theme’s id; name is what is shown.
Everything except background, foreground, accent, and ansi is optional.

Gradients and images

background also takes two colours:
And a theme can carry an image behind the terminal:
The Settings panel has a picker for both, so you rarely have to write this by hand.

Editing in the app

Select a built-in theme and hit Duplicate to edit — built-ins are read-only, so the editor works on your copy. From there you get every colour, including the sixteen ANSI slots, plus the background image controls. Changes are written back to your themes folder as YAML.

Importing from iTerm2

Drop an .itermcolors file into the themes folder and tty7 reads it directly — no conversion step.
A theme file tty7 could not load is listed in Settings under Not loaded from the themes folder, with the reason, rather than silently ignored.