Moonshine worms are a popular bait species used for fishing. The taxon was not detected during surveys of the macrobenthos conducted in Knysna in the 1940s and 1990s, and was first reported as a harvested bait species in the mid-2000s, suggesting that it appeared for the first time in the estuary in the last three decades. A previous molecular analysis identified the worms as Diopatra aciculata, a species first described from Australia. This study provides an updated detailed morphological description of D. aciculata in South Africa to facilitate future identifications and also investigates the species' distribution and population size in the Knysna Estuary. Specimens were examined by scanning electron, stereo- and compound microscopes. Diopatra aciculata has tubes that protrude from the sediment in sandy areas, often decorated with algae and shell fragments; a large body size, up to 600 mm long and 11.5 mm wide. It has 10–18 rings on ceratophores; 5–10 teeth on pectinate chaetae; uni- and bidentate pseudo-compound falcigers and dorsal cirri approximately as long as branchiae. Diopatra aciculata was detected up to 12 km from the mouth of the Knysna Estuary with densities measured at 18 sampled sites. Statistical analysis retrieved high and low density groups that were significantly different from one another (Kruskal-Wallis H(14, 800) = 376.55; P = 0.01), but distribution of high density sites was patchy. We estimate that the population comprises 20–24 million individuals. Given the size of individual worms and the population estimate, this species can be expected to have significant ecological impacts in the estuary.