Bioluminescence

Bioluminescence is the way that living organisms emit light. It is employed by nearly all Pandoran animals. Even the Na'vi have patterns of glowing dots that are unique to each individual. To avoid being detected by predators or prey, animals can damp down their own light. The RDA exploited it as another resource in the form of exotic jewelry and clothing.

Colors

Most of Pandora's flora and fauna emit only one single color, often green, blue, indigo, or violet. There are exceptions, like the warbonnet fern. Its leaves are illuminated by a broad band of red near their stems and by an iridescent blue near their tips. On Pandora, there is also a bioluminescent moss that is touch-sensitive. It will send out rings of blue-green light as a reaction to footsteps.

Anatomical Structure and Mechanism 

Bioluminescence is an enzymatic reaction that produces so called cold light. This reaction raises the valence electrons in the molecules of an organic compound to an orbit of higher energy. While decaying to its original state the electrons emit photons of visible light. It is a highly efficient reaction as it converts nearly all energy into light.
The reaction can occur within the metabolism of the creature or within symbiotic organisms that live inside of specialized organs, receiving food and oxygen from their host, and producing light in return.
There are several ways in which light production can be controlled:

• Limiting the availability of the involved chemicals
• The reaction takes place in an organ that can be moved away from the surface
• A translucent muscle carries the light from an internal organ to the surface by expansion and contraction
• Covering of the light producing area with dark pigment cells (melanophores)
• A dark membrane that can be drawn over the light producing area