Like other fairywrens, the lovely fairywren is notable for its marked sexual dimorphism, males adopting a highly visible breeding plumage of brilliant iridescent blue and chestnut contrasting with black and grey-brown. The brightly coloured crown and ear tufts are prominently featured in breeding displays. The male in breeding plumage has striking azure blue ear coverts, crown and upper back, a black throat and nape, chestnut shoulders and a white-tipped blue tail. The wings are black and the belly white. The female has smoky blue upperparts and tail, with turquoise ear tufts, and dark grey wings, and white below. Both sexes have black bills, brown eyes and flesh-grey feet. Immature birds resemble females but have brown bills.
The lovely fairywren is insectivorous and eats several types of insects, including caterpillars.
The lovely fairywren is brood-parasitized by the brush cuckoo.