Malacosteus has an elongated body with short, blunt snouts and large eyes that face forward, granting binocular vision. Unlike other stomiids, it has a single round nostril on each side in front of the eye. Relative to its size, Malacosteus has one of the widest gapes of any fish, with a lower jaw measuring one-quarter of the fish's length.
The lower jaw has no ethmoid membrane (floor) and is attached only by the hinge and a modified tongue bone. There are several large, fang-like teeth in the front of the jaws, followed by many small barbed teeth. There are several groups of pharyngeal teeth that serve to direct food down the esophagus.
The pectoral and pelvic fins are moderately long, containing 3-4 and 6 fin rays respectively. The dorsal and anal fins are placed far back on the body and contain 18-20 and 19-22 rays respectively. The caudal fin is small, with the lower lobe larger than the upper.
There are three bioluminescent photophores near the eyes: beneath the eye is a large, teardrop-shaped suborbital photophore that emits red light. Behind it is an ovoid postorbital photophore that emits green light; this photophore is larger in males than females.
These red and green photophores are evocative of traffic lights, hence the fish's common name. The third is tiny and round, located between the eye and the large red photophore. Several rows and clusters of blue photophores are present on the sides and belly.
In addition, there are small photophores and accessory areas of white luminous tissue scattered over the head and body. The skin is thin and scaleless; the coloration is black