A few years ago I started to notice a yellow fungus growing in the soil of a few of my potted plants. Assuming it to be not a good thing, I applied fungicide and it dried up and seemed to go away. Problem solved?
Well, eventually I noticed this yellow stuff had a tendency to come back, and if I let it go for very long it quickly grew these bright yellow mushroom heads. Oh! Kind of cool, but still, that can not be a good thing, could it?
Thank you, Internet. I decided to find out whether these mushrooms are a problem and if so how best to deal with them, so I did a search and learned the following:
They are a species of fungus called Leucocoprinus birnbaumii, also known as Lepiota lutea. Common names are "flower pot parasol" and "plant pot dapperling."
The yellow mushrooms are the "fruit" of the fungus that mostly lives as a fibrous colony under the soil. It is not known to damage plants, as it feeds on dead organic matter and apparently does not interfere with the plant itself. It likes warm and moist conditions, and can grow outside in warmer climates. They are rather difficult to remove, as you need to eliminate not only the fungus itself but also its spores, which become airborne and can be carried surreptitiously on clothing, tools, etc. They are not edible and may be toxic or at least cause digestion problems. It is recommended to let them be and enjoy them, but remove the mushrooms if there is a danger a child or pet might eat one.
Here are some links to sites I found that talk about these little fun-guys. They include some photos, but you can probably recognize what I'm talking about and now you know what they're called:
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