The Hubble photo shows rung-like features that could be easily mistaken for a ladder or a spider web.
But the Red Rectangle is neither of those and is instead a large nebula or cloud of gas ejected by a dying star.
NASA said: "Hubble's sharp picture shows that the Red Rectangle is not really rectangular, but has an overall X-shaped structure, which astronomers interpret as arising from outflows of gas and dust from the star in the centre.
"The outflows are ejected from the star in two opposing directions, producing a shape like two ice-cream cones touching at their tips.
"Also remarkable are straight features that appear like rungs on a ladder, making the Red Rectangle look similar to a spider web, a shape unlike that of any other known nebula in the sky"
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The nebula is officially known as HD 44179 and its nickname was coined in 1973 by astronomers Martin Cohen and Mike Merrill.
The star at the centre of the nebula is believed to have once resembled our Sun.
But it is nearing the end of its life and is shedding layers of stellar material out into space.
The star most likely began to shed its material about 14,000 years ago.
And in a few thousand years, the star will shrink and will become hotter, releasing in the process vast amounts of ultraviolet radiation.
The radiation will flood the surrounding nebula and it give it a fluorescent property.
The result of this process is something astronomers refer to as a planetary nebula.
NASA said: "At the present time, however, the star is still so cool that atoms in the surrounding gas do not glow, and the surrounding dust particles can only be seen because they are reflecting the starlight from the central star.
"In addition, there are molecules mixed in with the dust, which emit light in the red portion of the spectrum.
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"Astronomers are not yet certain which types of molecules are producing the red colour that is so striking in the Red Rectangle, but suspect that they are hydrocarbons that form in the cool outflow from the central star."
Thanks to the power of the Hubble telescopes, astronomers have been able to detect a dark band crossing the central star.
The band is the shadow cast by a dense disk of dust that surrounds the dying star.
The star itself cannot be directly seen because of this dusty barrier.
Instead, astronomers can see the star's light streaming perpendicularly from the star.
The light can then be seen when it is scattered by the dust towards us.
NASA said: "Astronomers found that the star in the centre is actually a close pair of stars that orbit each other with a period of about 10-and-a-half months.
"Interactions between these stars have probably caused the ejection of the thick dust disk that obscures our view of the binary."
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