The fruit bodies resemble tiny bird's nests filled with "eggs" – spore-containing structures called peridioles.

Like other bird's nest fungi, C. olla relies on the force of falling water to dislodge peridioles from fruiting bodies to eject and disperse their spores.

It is the subject of agricultural research to determine its potential as a means to accelerate the breakdown of crop residue, and reduce the population of plant pathogens.

[5] The 'eggs', or peridioles, typically number 8 to 10 in the cup, and they are white or grey in color, with a diameter of 2–4 mm—conspicuously larger than other Cyathus species.

[7] A different form of this species, Cyathus olla forma anglicus, originally reported from England by mycologist Curtis Gates Lloyd,[5] has also been found in Oregon and Colorado in the US,[8] Alberta Canada,[9] and in Argentina.

[12] In 1927, George Willard Martin examined the microscopic features of various members of the family Nidulariaceae, including Cyathus olla.

[13] Brodie notes that this species usually grows in moist and shaded locations, although its discovery in the arid regions of Lima, Peru, suggest that it is tolerant of low-moisture conditions.

[14] The life cycle of Cyathus olla, which contains both haploid and diploid stages, is typical of taxa in the basidiomycetes that can reproduce both asexually (via vegetative spores), or sexually (with meiosis).

When two homokaryotic hyphae of different mating compatibility groups fuse with one another, they form a dikaryotic mycelia in a process called plasmogamy.

The peridiole, attached to the plant, may be eaten by herbivorous mammals, and the subsequent passage through its digestive tract will soften the hard shell enough to facilitate later sporulation.

This reduced ejection distance may be due to such factors as the greater size of peridioles, the looser construction of the funiculus, or the increased flaring seen in the upper lip of the splash cup.