Is extending hair through highlights unlawful in Islam? Is prayer considered valid in such a case? Does the same ruling apply to hair coloring?

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and Messenger.

Extending hair through highlights implies two things according to common usage of the term:

1- Hair dyeing, which is permissible in Islam as long as it is not a black dye and the process does not constitute any harm to the person. There are religious texts indicating the unlawfulness of dyeing one's hair with a pure black color and underlining the unlawfulness of harming oneself or causing harm to others. The Prophet, sallallaahu ‘alayhi wa sallam, said: "There should be neither harm nor malice." [Ibn Maajah; As-Suyooti: Hasan; Al-Albaani: Saheeh]

2- Lengthening one's hair artificially and this is also unlawful in Islam.

Nonetheless, both hair dyeing and artificial hair extensions do not invalidate prayers unless it prevents water from reaching the original hair when wiping over one's head in ablution or reaching the skin during Ghusl (i.e. ritual bathing) in the case of Janaabah, menstruation or post-partum bleeding.