Lysmata amboinensis is easily recognized by its yellow-orange color contrasting with red and white stripes along the top of the head and body. The antennae are white and very long. The native habitats of this species are caves and ledges of coral reefs of the Indo-Pacific and the Red Sea, in depths from about 5-40 m (Allen 2000, Wong & Michiels 2011). L. amboinensis is considered a cleaner shrimp because it gets much of its food by removing external parasites and old skin from moray eels, groupers, and other fishes.

This species has a very unusual sexual system. The shrimp initially develop and reproduce as males then develop female reproductive organs to become hermaphrodites and function as both males and females throughout the reproductive cycle (Fiedler 1998). This system called protandric simultaneous hermaphroditism is so far known only from caridean shrimp in the closely related genera Lysmata and Exhippolysmata (Baeza 2009, Baeza 2010, Baeza et al. 2009).

Lysmata amboinensis is a commonly traded ornamental shrimp for marine aquaria (Lucas & Southgate 2012). Most of the commercially sold shrimp are wild-caught, raising concerns about negative ecological impacts on their reef habitats (Calado et al. 2003). Efforts to develop captive breeding programs are underway in order to alleviate the pressures of harvesting in the wild (Calado 2008).