In computer terminology, polymorphic code is code that uses a polymorphic engine to mutate while keeping the original algorithm intact. That is, the code changes itself each time it runs, but the function of the code (its semantics) will not change at all. This technique is sometimes used by computer viruses, shellcodes and computer worms to hide their presence.
Encryption is the most common method to hide code. With encryption, the main body of the code (also called its payload) is encrypted and will appear meaningless. For the code to function as before, a decryption function is added to the code. When the code is executed this function reads the payload and decrypts it before executing it in turn.
Encryption alone is not polymorphism. To gain polymorphic behavior, the encryptor/decryptor pair are mutated with each copy of the code. This allows different versions of some code while all function the same.
Read more about Polymorphic Code: Malicious Code, Example
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