Werewolves are members of other races that have been afflicted with lycanthropy, a specialized status ailment in T.O.E. The ailment turns the sufferer into a berserk, bipedal canine that relies more on base instinct and pack mentality than rational thought. Werewolves can pass lycanthropy on to other races through their bite, though some rare individuals seem to be immune to the effects. Lycanthropy can be cured with wolfsbane laced with silver powder.
The lycanthropy status ailment in T.O.E. is glitchy in nature. The effects of lycanthropy are cumulative: whenever someone receives a dose of the ailment, they become gradually more and more wolfish, and they can then pass some of their wolfishness off to someone else. This means that a werewolf that has bitten enough people in a short period of time will revert to their original form. Lycanthropy continues to build, however, and yet-afflicted creatures will become werewolves again in short order. These mathematical problems make lycanthropy a potentially world-devastating ailment.
Individuals with incredible willpower, such as Antonia, can resist the urge to bite others. Whether she built up this willpower over time, or possessed it from the start, is unknown.
Werewolves apparently look a lot like kangaroos.