It is commonly called the sphagnum greyling due to it being found in peat bogs and to its cap turning grey as it ages and dries.

The cap is 1 to 3 centimetres (0.39 to 1.2 in) in diameter, starting as conical or bell shape when young, expanding flat with a distinct umbo when older.

It is smooth, striate, and hygrophanous; usually an olive-brown when moist, drying to a pale grey color.

Grows in spring to early summer in cool northern climates that support Sphagnum.

Sphagnurus paluster parasitizes living Sphagnum mosses by forming penetration pegs through hyphae pressure.