diff --git a/xarray/plot/utils.py b/xarray/plot/utils.py
index 6e11be8b363..717adc41ffd 100644
--- a/xarray/plot/utils.py
+++ b/xarray/plot/utils.py
@@ -131,8 +131,9 @@ def _color_palette(cmap, n_colors):
 
     colors_i = np.linspace(0, 1.0, n_colors)
     if isinstance(cmap, list | tuple):
-        # we have a list of colors
-        cmap = ListedColormap(cmap, N=n_colors)
+        # expand or truncate the list of colors to n_colors
+        cmap = list(itertools.islice(itertools.cycle(cmap), n_colors))
+        cmap = ListedColormap(cmap)
         pal = cmap(colors_i)
     elif isinstance(cmap, str):
         # we have some sort of named palette
@@ -151,7 +152,7 @@ def _color_palette(cmap, n_colors):
                 pal = sns.color_palette(cmap, n_colors=n_colors)
             except ValueError:
                 # or maybe we just got a single color as a string
-                cmap = ListedColormap([cmap], N=n_colors)
+                cmap = ListedColormap([cmap] * n_colors)
                 pal = cmap(colors_i)
     else:
         # cmap better be a LinearSegmentedColormap (e.g. viridis)
diff --git a/xarray/tests/test_plot.py b/xarray/tests/test_plot.py
index b2094d7f627..50254ef4198 100644
--- a/xarray/tests/test_plot.py
+++ b/xarray/tests/test_plot.py
@@ -1805,8 +1805,9 @@ def test_colors_np_levels(self) -> None:
         artist = self.darray.plot.contour(levels=levels, colors=["k", "r", "w", "b"])
         cmap = artist.cmap
         assert isinstance(cmap, mpl.colors.ListedColormap)
-        colors = cmap.colors
-        assert isinstance(colors, list)
+        # non-optimal typing in matplotlib (ArrayLike)
+        # https://github.com/matplotlib/matplotlib/blob/84464dd085210fb57cc2419f0d4c0235391d97e6/lib/matplotlib/colors.pyi#L133
+        colors = cast(np.ndarray, cmap.colors)
 
         assert self._color_as_tuple(colors[1]) == (1.0, 0.0, 0.0)
         assert self._color_as_tuple(colors[2]) == (1.0, 1.0, 1.0)