An endangered species, it is found only at Lane Cove Bushland Park in suburban Sydney.

[1][2][3][4] Hygrocybe lanecovensis was originally collected by Ray and Elma Kearney in Lane Cove Bushland Park in Sydney's suburban Lower North Shore district on 13 June 1998, and officially described by Australian mycologist Tony Young in 1999.

[5] The fruit body of Hygrocybe lanecovensis is a small red mushroom; the cap is a vivid scarlet, convex in shape and is 1-2.3 cm in diameter.

[5] The related Hygrocybe kula, found in Royal National Park as well as Lane Cove Bushland Park, is similar in being red with decurrent gills, but its gills are more creamy and not visible through the cap surface.

[6] Fruit bodies appear in sandy soil among leaf litter in wet sclerophyll forest or warm-temperate rainforest in cooler months, with collections recorded in June and August.