The morphology of Halichondria panicea can be highly variable (see General biology). Most commonly found on the open coast, it can form a low crust with 'volcano' like exhalent openings (osculae). In wave sheltered areas, the species may grow to a massive form up to 20 cm thick, and in tidal rapids or sounds may be several metres across. Vethaak et al. (1982) recorded a specimen that measured ca 60 cm across and 25 cm high in the Oostershelde, although most specimens are rarely this big. Colonies are sometimes composed of connecting (anastomose) lobes or digits. On the shore and in shallow depths, it may be green due to the presence of algal symbionts in the tissue. In the shade and deeper water or in winter it is cream-yellow in colour. Halichondria panicea smells strongly of seaweed.Halichondria panicea occurs on kelp stipes where it may dominate in tidal rapids and on other algae such as Halidrys siliquosa (sea oak). In low or variable salinity (for instance, in the western Baltic), it may be found encrusting predominantly on red algae such as Phyllophora sp. and Phycodrys sp. (Barthel, 1988). Halichondria panicea was found growing on tunicates (especially the invasive Leathery sea squirt Styela clava) and molluscs in the Oosterschelde (Vethaak et al., 1982).