It was first described by Hoffmann in 1784 under the name Lichen parasiticus, until he reclassified it under the genus Cladonia in 1795.

Cladonia parasitica mainly grows on old oak and pine wood.

When apothecia are present they take the form of small brown morel-like protrusions atop the branches.

The species is found in North America and Eurasia in the boreal, boreal-nemoral, and nemoral regions.

Cladonia parasitica is considered a red-listed species in Sweden, categorized as (Near Threatened).