The 32-year-old, who has played Jared 'Toadfish' Rebecchi (Toadie) for nearly 18 years, told MSN that he hated his character's signature hairstyle.
"It's a little embarrassing when you look back at those photos and go, 'Wow, what was I thinking?'" he explained.
"I think it was the worst haircut in the world, it looked like I had a dead rat hanging out the back of my head.
"Unfortunately the producers made me keep it for a number of years. It was quite hard being an 18-year-old guy with that kind of thing hanging on your head."
Viewers eventually saw Toadie's ponytail being chopped off in public by Lou Carpenter (Tom Oliver) in an episode that aired in 1999.
Moloney joked that recording the scene was the high point of his career.
"It was the most fantastic moment of my Neighbours life," he said. "It's gotta be the most freeing part of the whole thing.
"They auctioned it off for a charity. Someone in England got it."
When asked about his character's future, Moloney said that he would like Toadie's storylines to mirror his own ambitions.
"I'd like to see him take up flying and that way Neighbours can pay for my flying lessons, that would be brilliant," he quipped. "I'm going for my commercial license. It's a little pricey so it'd be nice if Toadie did the same thing."
Neighbours airs weekdays at 1.45pm and 5.30pm on Channel 5.
Watch Toadie having his trademark ponytail cut off below: