The boy had lived with the twin in his stomach his whole life, but went to hospital after complaining of pain.
His mother told Bernama the foetus "was formed with organs like those of a baby".
It is believed to be the first reported case of the condition, known medically as "fetus in fetu", in Malaysia.
The boy's mother, 38, said funeral rites had been performed on the foetus and it was buried at a local cemetery.
Reports said the foetus had legs, hands and genitals.
"Only the nose and mouth were not complete," she said, saying she had accepted his fate.
The teenager had been admitted to a local district hospital before being referred to the Sultan Abdul Hamid Hospital in Kedah for the operation to remove the twin.
The hospital and Malaysia's government health officials would not comment on the case to the BBC.
What is fetus in fetu?
Dr S Raman, obstetrics and gynaecology specialist at Pantai Hospital in the capital, Kuala Lumpur, told the BBC it is when an "additional twin gets absorbed into the body of the living twin".
"It's almost like a vanishing twin, or sometimes called a parasitic twin," he said.
"I have actually seen a case of the foetus being attached to the outside of the living twin, so it's possible for the twin to be both inside or outside the body."
There have also been cases of two twins found inside the abdomen of one child, in the case of a triplet pregnancy.
What causes it?
There is no known trigger, but it occurs in the early stages of development when one foetus wraps around the other.
The enveloped twin then does not fully form but becomes a "parasite", relying on their host twin for their survival. Such twins usually die before birth.
The abnormality is estimated to occur in 1 in 500,000 live births.
Is it unusual to live so long with the twin?
One widely reported case was of a 36-year-old man in India whose tumour had grown so big that he was having difficulty breathing.
In villages or smaller towns where access to medical facilities are limited, it is possible for someone to not know they have a foetus and live with it their entire life, says Dr Raman.
The abnormality is easily spotted if a baby undergoes an ultrasound or CT scan, and there have been cases of babies as young as three months old being operated on.
A 15-year-old Malaysian boy has had the parasitic foetus of his twin removed from his stomach, Malaysia's Bernama state news agency reports.