[7] A molecular phylogenetic analysis of several dozen European Mycena species suggests that M. sanguinolenta is closely related to M. galopus.

The pleurocystidia (cystidia on the face of a gill) are rare to scattered or sometimes quite abundant, narrowly to broadly ventricose, measuring 36–54 by 8–13 μm.

The flesh if the gill is made of broad hyphae the cells of which are often vesiculose (covered with vesicles) in age, and stain pale reddish brown in iodine.

[9] The other "bleeding Mycena" (M. haematopus) is readily distinguished from M. sanguinolenta by its larger size, different color, growth on rotting wood, and presence of a sterile band of tissue on the margin of the cap.

It has been found from Maine to Washington and south to North Carolina and California in the United States, and from Nova Scotia to British Columbia in Canada.

[12] The distribution includes Europe (Britain,[13] Germany,[14] The Netherlands,[15] Norway,[16] Romania[17] and Sweden[18]) and Australia.

[21] The fruit bodies grow in groups on leaf mold, moss beds, or needle carpets during the spring and fall.

[18] The fruit bodies of Mycena sanguinolenta contain the blue alkaloid pigments, sanguinones A and B, unique to this species.

The sanguinones are structurally related to mycenarubin A, made by M. rosea, and the discorhabins, a series of compounds produced by marine sponges.

[22] When grown in pure culture in the laboratory, the fungus produces the antifungal compound hydroxystrobilurin-D.[23] M. sanguinolenta is one of over 30 Mycena species that is bioluminous.