Its natural range lies just to the west of the related Aloiampelos ciliaris, and it occurs in bushy fynbos and dry thickets, and clustered on rocky outcrops at all altitudes.

It can easily be distinguished from other species in the genus by its long (45 mm), thin, bright red flowers which appear on multi-branched racemes.

[3] Aloiampelos gracilis is naturally restricted to a relatively small area around the city of Port Elizabeth in the Eastern Cape, South Africa, and extends westwards into the Baviaanskloof mountains.

[5] Due to its natural vegetation being prone to seasonal fires, this plant has evolved the ability to re-sprout from its rootstock after being burnt.

However Aloiampelos gracilis can easily be distinguished by its erect (rather than recurved) leaves, its sparse, multi-branched racemes of red flowers, and its relatively thinner stem.