As the railway developed, it became apparent that a signalling system was required. Currently, two signal boxes control train movements around the railway and communicate with each other using a traditional bell code and block instrument system. Moors Valley Railway is fully signalled with both semaphone and colour light signals, and the main lines are fully track circuited, which enables the signalman to monitor train progress when out of visual range on bespoke track diagrams. Trackside phones are positioned near key signals so that drivers and signalmen can be in direct contact.

Most of the signals are controlled from the signal box outside Kingsmere Station – Kingsmere East Signal Box. The Southern Railway style signal box was built on site around a 28 lever Stevens frame obtained from one of the signal boxes at Becton Gas Works in London. The main frame controls the movements in and around the station, as seen on the track diagram,
whereas the Lakeside end is controlled using an electrical route setting
panel. More recently, a miniature 12 lever frame has been installed to
control movements around the extended carriage shed and station avoiding line. The semaphore signals in the station area are either operated by wire and pulleys or compressed air from the main lever frame. The points are operated using air cylinders or traditional rod and crank method and all are electrically or mechanically locked for safety reasons. The levers are painted in different colours dependant on their purpose, essentially red for signals and black for points.

Kingsmere West Signal Box was installed in 1998, and was originally painted in Great Western Railway style colours, but has since been repainted into MVR house colours (maroon and cream) on the outside, although the interior remains in GWR colours. It has a 17 lever frame controlling movements around the locomotive yard and entry into Kingsmere Station, in addition to allowing access to the station avoiding line. The signal box came complete with a traditional wood burning stove. It is usually closed during normal passenger running hours and only opens to allow access to the yard at the beginning and end of the day. It will also be in use during event days, to help Kingsmere East Signal Box with the higher number of train movements.

On normal running days, the signalling system can be set to automatic, enabling the railway to run without a signalman present. Sprung points are used to allow trains to run a normal circuit around the railway safely, being controlled by automatically resetting signals. Up to eight trains can run at any one time when the signal box is open.