Ares originally disguises it as a hunting knife when he first meets Annabeth, Grover, and Percy. He uses it to clean his fingernails, threatening the mortal waitress to take the golden drachma as payment for the burgers that the three demigods eat. He also cloaks it as an aluminum baseball bat shortly before dueling against Percy. In addition, it's seen by mortals through the mist as a shotgun.
Although the sword can morph into whatever weapon Ares wants, such as a shotgun or a baseball bat, its true form is that of a long sword with a skull-shaped pommel and a ruby embedded in the mouth.