It has two distinct color morphs; in one the head, most of the body, wings, and tail are dull dark brown with white markings and in the other the same areas are dark chestnut with buff markings.

The sides of the breast are dark brown or chestnut with pale markings; the white breast and belly have heavy dark brown or chestnut streaks.

It inhabits a variety of mountain landscapes including cloudforest, elfin forest, Polylepis woodland, and sometimes more open landscapes like forest edge and pastures with scattered trees.

In elevation it ranges from about 1,500 to 3,500 m (4,900 to 11,500 ft) in Colombia and somewhat higher in Venezuela, Ecuador, and Peru.

The Andean pygmy owl's song is a "long series of rapidly delivered, evenly spaced 'poop' notes" that is sometimes preceded by two whistles.