Blood Moon

The Blood Moon is an occasional event in Terraria which causes the moon and the sky to turn red. During a Blood Moon, enemy spawn rates double, Zombies and Possessed Armor can open doors, and Goldfish and Bunnies will turn corrupt, exposing any NPCs in the path of the monsters to harm. Each night has a 1/9 chance of the Blood Moon rising when at least one of the players in the world has over 100 health. Because of these effects, it would be a good idea to barricade your house by making no way in for monsters if you are just starting out.

As of 1.1, the following creatures have been known to attack without meeting other requirements: Werewolves, Wyverns, Unicorns.

When Night comes and it's a Blood Moon, a message will appear saying "The Blood Moon is Rising...". Fighting monsters on a Blood Moon is a great source of income, due to the increased rate of enemy spawning. You will most likely do very well if your character has at least medium-level equipment (Silver is usually very good during Blood Moon attacks, although if your house has only one entrance it is possible to use lower level). Others who are not so fortunate and wish to survive may wish to block Doors and seal off entranceways. If a 2x2 trench is dug in front of a door, Zombies are unable to open it because they cannot knock and jump simultaneously.

The easiest and most effective way of blocking out zombies and other earth-bound monsters is to simply build your NPCs' houses suspended in the air. A gap at least 10 blocks high should work. You can make a workshop underneath the houses as well! This technique works very well if you just can't be bothered to protect your house (The Blood Moon does drag along a bit).

Another way to block out Zombies is to place a solid background object (i.e. Wood Platform) in the way of the door when swung open from the outside. You can open the door one way as much as you want (you can open it both ways, but you have to be facing a different way each time you do it), but Zombies will not be able to open it the opposite way. NPCs can still use the doors effectively.

An easy way to keep the zombies outside is to use Active/Inactive Stone Blocks as your door. However, this does not  count as a door for NPC houses.

There is also a trick where you can put one block in front of the door and open it while the Zombies are outside. Since Zombies follow the Fighter AI, when they realize they can't get to you, they will retreat and despawn. Although this doesn't give you any loot, it's a quicker way to get rid of Zombies.

Of course, if you have fairly powerful weaponry and armor, you can simply let the Zombies and Demon Eye into your home, where you can group them up and kill them. Doing so is a good way to acquire money and materials like lens, which can also be sold for some small funds.

Players can additionally create lava pits to farm for coins. Build a pit for the player to stand in and on top of. Place a roof that also is a pit 1 block thick. Fill it with 1 bucket of lava. Since monsters always try to reach the player, they will touch the lava and die. To make sure this works, step in the lava with health potions. If damaged, the pit works. Next, throw an item in the pit. If the item is still regainable, the pit is perfect.

A Blood Moon is the only time period that Deathweed will bloom and drop seeds.

During a Blood Moon, NPCs will also display unique dialog. Here's a list of quotes that can only be seen during a Blood Moon.

Guide
 * "You can tell a Blood Moon is out when the sky turns red. There's something about it that causes monsters to swarm."

Merchant
 * "Hey, this house is secure, right? Right? [Player Name]?"
 * "Keep your eye on the prize, buy a lens!"
 * "Not even a Blood Moon can stop capitalism. Let's do some business."

Demolitionist
 * "I've got something for those zombies, alright!"
 * "There was a bomb sitting right here now I can't seem to find it..."

Dryad
 * "Dude, is it just me or is there like a million zombies out tonight?"
 * "I sell what I want, alright! If you don't like it, too bad."
 * "I don't want you to buy my stuff, I want you to want to buy my stuff, ok?"
 * "Why do you have to be so confrontational during a time like this?"

Arms Dealer
 * "I love nights like tonight. There's never a shortage of things to kill!"
 * "Man, it's a good night not to talk to anybody, don't you think, [Player Name?]"

Clothier
 * "[Player Name]... We have a problem! It's a Blood Moon out there!"

Nurse
 * "WHAT!?"
 * "Hurry up and stop bleeding."
 * "What's that supposed to mean?!"
 * "I don't think I like your tone."

Mechanic
 * "Oh, let me guess. Didn't buy enough wire. Idiot."
 * "I don't appreciate the way you're looking at me. I am WORKING right now."
 * "Just-could you just..Please? Ok? Ok. Ugh."
 * "All I want is for the switch to make the... What?!"

During a Blood Moon, NPCs will also sell different items:


 * Dryad will sell Vile Powder and Corrupt Seeds.
 * Merchant will sell Throwing Knives
 * Arms Dealer will sell Silver Bullets.
 * Clothier will sell the Mime Mask.

Trivia

 * A Blood Moon can only appear if one player has more than 6 hearts (120+ HP).
 * As of update 1.1, the Blood Moon has been given a more noticeable effect on friendly NPCs as well, primarily the female ones. Quotes from the Nurse, Dryad and Mechanic all seem to show hostility or annoyance and even bad stress when acknowledging the player, compared to other days/nights. This is possibly a joke using "Blood Moon" as a reference to the female NPCs' periods. Male Vendor NPCs show excitement for the Blood Moon, as it may increase their sales.
 * As of 1.1, the Possessed Armor enemy has the ability to open Doors on a Blood Moon.
 * During a Blood Moon, Zombies have also the ability to open doors.
 * As of 1.1, the chance of a Blood Moon was decreased to 1/9 from 1/7 in earlier versions and a 2/7 chance on a full moon on both modes
 * It is rare, but possible to have a Blood Moon at the same time with a Full Moon, usually causing a swarm of werewolves to appear on hardmode worlds, allowing you to effectively farm the Moon Charm.
 * It is possible to have a Blood Moon two nights in a row, but it is extremely rare.
 * Some NPCs might sell items you can only buy on Blood Moon in daytime. It means that night is going to be a Blood Moon. (Example: A clothier might sell Doctor's Outfit in daytime. That means that night is a Blood Moon.)