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Malfestation is caused by Soul Edge's curse. It is regarded as a type of cancer, or even an entirely new parasitic organism. However it causes enchanced physical abilities among it's victims, and can cause victims to mutate into more powerful states of being when they experience intense emotion. It can also causes some victims to gain what appears to be some kind of immortality.
The traits gained by the victims are possibly based on their personality and physique, as Tira may have stopped aging due to being part of a clan that valued survival above all else. Male Malfested often display physical transformations while females generally don't, though exceptions like Pyrrha Omega exist.
Malfested animals that act as minions for Soul Edge are known as Watchers. Cervantes' shark, Nightmare's hawk, and Tira's crows are examples of Watchers.