A common feature Beneath the Earth, in the Mouse World and in The Lost Woods alike, it is not uncommon in fantasy settings to see people making their homes in hollowed-out mushrooms of various sorts. More often than not, this will happen in one of two ways, although exceptions and overlap of course exist:
Sometimes, this kind of residence will be made out of normal-sized mushrooms and will be the home of choice for diminutive humanoids such as gnomes, fairies, pixies and other such Lilliputians. These Mushroom Houses will typically look like toadstools with stout stems fitted with doorways and windows, and with the inside furnished to provide its inhabitant a comfortable home. The mushroom's cap — which will often, but not always, be red with white spots in resemblance to a fly agaric — may or may not be fitted with windows of its own. This sort of house is a common feature of the more magically inclined Mouse Worlds.
The other common variant involves normal-sized people living in giant-sized mushrooms instead. These will typically serve as a much more alien variant of the Arboreal Abode, highlighting the alien, magical or generally otherworldly and unusual nature of the place they're found in. This type may sometimes be paired with intelligent mushroom people.
- Magi-Nation: The Underneath, a vast region of caverns Beneath the Earth, is almost entirely covered by vast forest-like growths of gigantic mushrooms with purple stalks and orange, spotted caps. For lack of other building materials, the locals often hollow these mushrooms out, fit them with doors and windows and use them as their primary source of housing.
- The Smurfs: The eponymous tiny blue humanoids live in a hidden village in the forest made up of mushrooms like this, with stout round stems hollowed out to make houses and tall, colorful caps. Unless they're actually regular if tiny houses built to look like mushrooms, in an in-universe invoking of this trope.
- The Light Fantastic: While traveling through the Forest of Skund, the protagonists meet Swires, a gnome living inside a mushroom with a red cap with white spots. The mushroom itself is described as belonging to a kind that a shaman they met previously, who habitually consumed hallucinogenic fungi to trigger religious experiences, would only eat "after tying himself to a rock".
- In the October Daye series, pixies can and do set up housekeeping in the real world wherever they can. However, inside Faerie, they live in Mushrooms, many of which are puff balls that give off knockout spores as a defense mechanism.
- In Dungeons & Dragons:
- 11 miles Beneath the Earth in the Forgotten Realms, the Underdark "Garden City" of Fluvenilstra is partly built into the giant mushrooms and other magically enhanced plants that dominate the local landscape. It also has relatively large Mushroom Man, Plant Person, and Planimal populations.
- The Myconids are a race of Mushroom People from the Underdark who cultivate a wide variety of fungi, including large ones that they sometimes use as dwellings.
- The Abyssal realm of the Demon Queen Zuggtmoy is a cavern choked with Festering Fungus and miles-tall mushrooms in which she has carved her palace.
- Pathfinder: Gerbies, a type of fairy resembling anthropomorphic crosses of rodents and lizards, live in houses made from hollowed-out mushrooms.
- Plopsaland De Panne in Belgium in its Het Bos van Plop ride shows dwarfs living in mushroom houses.
- The Elder Scrolls: In Morrowind, the nobles of the Great House Telvanni — a Great House focused on magic and ruled by wizards — reside in magically-grown giant mushrooms in which rooms and corridors are hollowed out, essentially forming giant fungal Mage Towers. The commoners live in smaller mushroom houses, the size of a cottage.
- If you join House Telvanni, you are eventually allowed to grow your own giant mushroom to live in, Tel Uvirith.
- Skyrim's Dragonborn DLC allows you to visit Tel Mithryn, one of the last surviving mushroom strongholds of a Telvanni noble, located on the isle of Solstheim.
- The Super Mario Bros. series has the mushroom-like Toads residing in Mushroom Houses since Super Mario Bros. 3. When you visit them, you often receive an item for your adventure or play a minigame.
- In Terraria, it is possible to build houses out of glowing mushrooms, and doing so is required in order to summon the Truffle.
- A Mushroom Factory is a major feature of one of the Ages in Uru: Ages Beyond Myst.
- The Adventures of Super Mario Bros. 3: Like in the games that inspired the show, the Toads of the Mushroom Kingdom are shown living in large mushrooms, which in this case are solid brown and with upturned caps with purple gills, with doors in their stems and windows in their caps.
- Ben and Holly's Little Kingdom features a village of fairies living in toadstools.
- The Fruitties: Some of the houses in Fruittie Village are big mushrooms.
- Kabouter Plop (Plop the Gnome), a popular Belgian children's show created by Studio 100, focuses on four (later six) small gnomes that live inside mushroom houses.
- My Little Pony: Friendship Is Magic: In "It Ain't Easy Being Breezies", the magically hidden home of the breezies is filled with mushrooms of this sort, with caps with glowing blue undersides. Unusually, however, the homes don't seem to be in the stems themselves. Instead, the tall, thin stems only have a doorway at their base, while multiple windows dot the broad caps high in the air.
- The Mushroom House in Perinton, New York, is about as close as you're going to get to living in a mushroom in real life. It's a one-story house in the woods made up of circular rooms, each with windows around its rim and covered with a domed roof with a blunt spike in its center. The house is built jutting out over a slope, and several of the round platforms are suspended in the air, each supported by a narrow pillar built to resemble a stem. It's supposed to be based on umbrella-shaped flowers like Queen Anne's Lace, but the final effect is far more reminiscent of mushrooms.
- Decorative mushroom houses are fairly popular in modern fairy gardens (small-scale outdoor features built along fairytale themes), especially when paired with gnomes.
- Several of the Mushroom Houses of Charlevoix are organically shaped stone structures with curved cedar-shake roofs, giving them a mushroom-like appearance and their colloquial name.
- Some species of fly larvae live in, and feed upon, the stems and gills of mushrooms.