The nebula is formed by plasma of ionized hydrogen and free electrons. It's intense red output and configuration are driven by the radiation emanating from a small group of stars near it's center.
This open cluster of stars known as Melotte 15 contains a few bright stars nearly 50 times the mass of our Sun and many more dim stars that are only a fraction of our Sun's mass. The cluster used to contain a microquasar that was expelled millions of years ago.
The very brightest part of this nebula [the knot at the right] is separately classified as NGC 896, as it was the first part of this nebula to be discovered.