It grows amongst dwarf shrubs of the genus Dryas in arctic or high mountain environments.

This species was originally described as Marasmius epidryas by Robert Kühner in 1935 in the annals of the Linnaean Society of Lyon, but the definition was considered invalid due to the lack of a Latin description according to the updated nomenclatural rules.

In 2009 Anna Ronikier published a correct description ascribing the name to Kühner (that is, giving credit to him) and so the first valid name with author attribution was "Marasmius epidryas Kühner ex A. Ronikier".

Then in 2011 Anna & Macheł Ronikier established that the species belongs in the new genus Rhizomarasmius and redefined the current name accordingly.

[6][1] This mushroom is found exclusively in cushions of Dryas plants such as D. octopetala (mountain avens) and D. integrifolia (entire-leaved avens), growing saprobically on dead leaves and stems.