The Moon Spirit was incarnated in the form of a white koi fish. It resided in the Spirit Oasis with its partner, the Ocean Spirit, a black koi fish. With the rise of the moon, the Northern waterbenders use its power to greatly enhance their waterbending ability.
The Moon Spirit's color remained white and a spot on its back glows every few seconds. Placing the Moon Spirit inside the bag did not affect the waterbenders' ability to bend; they only lost power once it was stabbed by Zhao. The moon in the sky turned red, though did not disappear altogether. Aang and Yue were affected by the disturbance Zhao was causing to the spiritual world. When the Moon Spirit was killed, Yue fainted, and Aang felt a sharp pain that shot through his head. Without the Moon Spirit, all waterbenders lost their ability to bend.
Yue was given life by the Moon Spirit when she was a stillborn baby, which caused her hair to turn white. She returned her life back to the Moon Spirit by lying beside it in the oasis pool. Blue-white energy leapt from Yue and moved into the Moon Spirit. In the process, Yue's hair turned from white to black. Yue's body did not disappear and become transformed into the Moon Spirit. Instead, it was left behind as a lifeless vessel, mourned by Sokka. Her sacrifice gave the Moon Spirit life, and allowed the return of the defenders' waterbending and fight back the firebending invaders.
- Zhao associated the Moon Spirit with Yang (white, male) and Pull (拉, Lā), a different convention than the animated series. As such, Yue referred to the Moon Spirit as male, saying "He gave me life when I was a child." The Ocean and Moon Spirits were not explicitly named in Chinese for the film, possibly to prevent confusion with Tui for the Moon Spirit and La for the Ocean Spirit in the animated series. For details on this convention, please see Ocean and Moon Spirits.