On a cloudless day the sky is blue because molecules in the air scatter blue light from the sun more than they scatter red light.

You probably know that the white light from the sun is a mixture of colors. These colors of light are distinguished by their different wavelengths. A wavelength is a measure of the distance between the crests of the waves. The wavelength of red light is the longest and blue light has the shortest wavelength, with orange, yellow, green, blue and indigo between. Shorter wavelengths (blue light) scatter better from small things than long wavelengths do. The blue color of the sky is due the molecules of oxygen and nitrogen in the air that cause the scattering.

The sun has a yellowish color because lots of white light sets out from the sun and passes through the atmosphere. The deeper it gets, the more of the blue light gets scattered away from its original path. By the time it reaches the ground the white light has gone a bit yellowish.

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When the sun gets really low in the sky, the light has to go through much more air, which is why the sun looks bright red (careful: never look at the sun directly unless it's very low, near to sunset - you could go blind). The light from the sun has passed a long distance through air and some of the blue light has been scattered away. If the air is polluted with small particles, natural or otherwise, the sunset will be more red. Sunsets over the sea may also be orange, due to salt particles in the air.