The lichen is composed of two thalli; an initial primary squamulose thallus growing across bark in a scaly, flaking pattern, followed by a secondary fruticose thallus (podetium), with cup shaped podetia (4-10cm tall) bearing terminal ascocarps contained in apothecial structures.

[3][4] The coloring of C. arbuscula varies between subspecies, but is primarily white-gray, pale yellow, or bright green, with darker orange tips where ascocarps are formed.

It is widely spread in Canada and the Northern United States (mostly Alaska), but also found in Wyoming, Idaho, and Montana.

[10] Lichens typically grow in areas of high climatic stress, where many vascular plants cannot tolerate the conditions and survive.

Other substrates that C. arbuscula can be found on include decaying organic material, raised peat, other coniferous or hardwood trees, and rely on lakeshore rocks.

With the exception of populations in the Pacific Northwest, reindeer lichen grow dominantly in cool, dry sites.

C. arbuscula is more commonly found in moist areas when compared to other species in the genus, but still prefers dry, cool habitats for ideal growth.

[3] Growth periods depend heavily on a multitude of outside factors, such as habitat, climate, amount of grazing, fire regimes, and substrate material.

Despite the low protein levels of these lichen, especially in comparison with other vascular plants, they are the main food source for many animals, and if not protected can cause bottom-up trophic cascades with detrimental effects on caribou populations.

[17] Thallus fragments can travel from unburned areas to freshly burned ones and easily colonize the shadeless, dry terrain.

Caribou grazing and trampling can affect the diversity of lichen in an area by causing early and late successional staged species to grow simultaneously.

C. arbuscula is extremely sensitive to pollution, and heavy metals and acids from factories or manufacturing facilities can travel miles and harm these lichen.