Usually found in warm, damp hardwood forests on the undersides of fallen logs and branches of deciduous trees, this unique fungus has been described as "blue velvet on a stick".

[3] It is dark blue with a paler margin, with a velvety or waxy texture when moist, but crusty and brittle when dry.

[4] The cobalt crust has a worldwide distribution in warmer climates, and has been reported from Asia, Africa, New Zealand, Eastern North America,[5] the Canary Islands, Europe,[6] Taiwan,[7] Thailand,[8] and Turkey.

[10] When activated by external treatments such as high temperature (42 °C (108 °F)), exposure to vapors of toxic solvents, or contact with a water-toluene mixture, T. caerulea produces an antibiotic named cortalcerone (2-hydroxy-6H-3-pyrone-2-carboxaldehyde hydrate), that inhibits the growth of Streptococcus pyogenes.

[16] Lamarck used the name Byssus caerulea, and various other designations were subsequently employed, until in 1828 Fries classified it as Thelephora violascens variety coerulea.