Methane gas escapes from Pluto's atmosphere, becomes "trapped" by the moon's gravity and freezes to the cold, icy surface at Charon's pole, researchers said.
This is followed by chemical processing by ultraviolet light from the Sun that transforms the methane into heavier hydrocarbons and eventually into reddish organic materials called tholins, they said.
"Who would have thought that Pluto is a graffiti artist, spray-painting its companion with a reddish stain that covers an area the size of New Mexico?" said Will Grundy, a New Horizons co-investigator from Lowell Observatory in the US.
The team combined analyses from detailed Charon images obtained by New Horizons with computer models of how ice evolves on Charon's poles.
Mission scientists had previously speculated that methane from Pluto's atmosphere was trapped in Charon's north pole and slowly converted into the reddish material, but had no models to support that theory.
Researchers dug into the data to determine whether conditions on the moon (with a diameter of 1,212 kilometres) could allow the capture and processing of methane gas.
The models using Pluto and Charon's 248-year orbit around the Sun show some extreme weather at Charon's poles, where 100 years of continuous sunlight alternate with another century of continuous darkness.
"The methane molecules bounce around on Charon's surface until they either escape back into space or land on the cold pole, where they freeze solid, forming a thin coating of methane ice that lasts until sunlight comes back in the spring," Grundy said.
But while the methane ice quickly sublimates away, the heavier hydrocarbons created from it remain on the surface.
The models also suggested that in Charon's springtime the returning sunlight triggers conversion of the frozen methane back into gas.
Sunlight further irradiates those leftovers into reddish material - called tholins - that has slowly accumulated on Charon's poles over millions of years.
New Horizons' observations of Charon's other pole, currently in winter darkness - and seen by New Horizons only by light reflecting from Pluto, or "Pluto-shine" - confirmed that the same activity was occurring at both poles.
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