The word Panaeolus is Greek for "all variegated", alluding to the spotted gills of the mushrooms produced.

These fungi are mostly dung and grassland species, some of which are quite common in Europe and North America.

The gills of Panaeolus do not deliquesce (liquefy) as do the members of the related genera Coprinellus and Coprinopsis.

Members of Panaeolus can also be mistaken for Psathyrella, however the latter genus is usually found growing on wood or lignin-enriched soils and has brittle stipes.

[3] The closely related genus Panaeolina shares the spotted gills but they are dark brown (not black) and the spores are ornamented.