The mushroom is found in North America, Asia, and Europe where it grows singly or in groups on conifer needles, cones and sticks on the forest floor.

The species was first called Agaricus leptocephalus by Christian Hendrik Persoon in 1800,[2] and was transferred to the genus Mycena in 1876 by French mycologist Claude-Casimir Gillet.

[8] The specific epithet leptocephala is derived from the Greek λεπτος leptos, "thin" and κεφαλη kephale, "head",[9] and refers to the delicate cap.

[11] The cap of M. leptocephala is 1–3 cm (0.4–1.2 in) in diameter, and initially a fat conical shape with the margin pressed close to the stem.

Its color is initially dusky brownish-gray to blackish (after the pruinose coating has sloughed off), soon fading from dark to light gray and finally ashy-gray.

It is usually bluish-black initially (darker than the cap) but gradually turns sordid brownish-gray, and finally fades to pallid or cinereous.

[12] The spores are broadly ellipsoid, amyloid (meaning they will adsorb iodine when stained with Melzer's reagent), and measure 7–10 by 4–6 μm.

[16] The pleurocystidia (cystidia on the face of a gill) are scattered, rare or absent, 30–44 by 9–13 μm, variable in shape, fusoid-ventricose to club-shaped, with some having a forked apex.

[13] The "stump fairy helmet" Mycena alcalina is a common species that is similar in appearance and odor to M. leptocephala.

[19] Alexander H. Smith considers M. brevipes close to M. leptocephala, but the former mushroom has a short stem up to 3.5 cm (1.4 in) long, typically grows singly, and lacks an odor.

Fruit bodies are found growing scattered to gregarious on fallen sticks and on needle carpets under conifers, and are rather common during early summer and again in the autumn.

[25] In Europe, it is known from Britain,[10] Finland, The Netherlands,[21] Norway,[8] and Spain[26] It has also been found in various locations in Asia: the Vindhya Range of India;[27] the Gwangneung Forest Museum in the Korea National Arboretum;[28] and the alpine zone of Changbai Mountain Nature Reserve, Jilin Province, China.