Mycelium is a block similar to grass blocks, but it is only found natively in Mushroom Island Biomes. It can grow over Dirt blocks that are nearby in a similar way to grass.
Mycelium looks and acts very similarly to grass. One of its defining characteristics is that the tops of Mycelium blocks have a particle effect that resembles tiny spores being released constantly from the surface. This effect persists even when the Mycelium block is covered in snow; the sides will use the same texture as snow-covered grass, with the spores being the only way to visually tell them apart.
Mushrooms spread faster on Mycelium than on other blocks, and Mycelium is the only block on which mushrooms can stay when an adjacent block is updated despite a light level that is normally too high for the mushroom to remain. It is also one of three blocks, along with dirt and grass, on which Huge Mushrooms may grow. Like most other blocks, both hostile and friendly mobs may spawn on it under the right conditions. Saplings and flowers cannot be placed on Mycelium, and it cannot be tilled with a hoe to make farmland.
Otherwise, it behaves identically to grass. When harvested, Mycelium normally yields a dirt block, but the Silk Touch enchantment can be used to acquire a Mycelium block. In Creative Mode, it can be equipped and placed like any other block.
It's the only block on which mushrooms can be planted and spawned while in direct sunlight.
Mycelium is only found naturally in Mushroom Island biomes, but it can spread anywhere or be pushed anywhere with a piston.
Mycelium spreads in exactly the same way as grass: A mycelium block can spread to any dirt block within one space above, one sideways, or three down. The mycelium needs light level 9+ above it and the dirt needs light level 4+ above it, and must not be covered by any light-impeding block i.e. water, ice, lava, slabs, stairs, farmland, or any opaque block. Mycelium also dies under the same conditions as grass: when covered by one of the light-impeding blocks above and the light level at that block is below 4.
Mycelium and grass do not replace one another; whichever arrives on the dirt first will remain. If there is a sapling, seed, or flower on a block of dirt when mycelium spreads to it, the plant will pop out and drop as an item. Pumpkins and melons will not spawn on mycelium, even if the stalk is otherwise healthy.
Generated caves and ravines in a Mushroom Island biome will not remove mycelium, often leaving a thin layer over a ravine or 'bars' of mycelium covering a cave.
While mycelium cannot take over farmland, any block that reverts (perhaps because a pumpkin grew on it) is vulnerable not only to visibly adjacent mycelium blocks, but also to buried mycelium in or next to the area. To restrain mycelium from spreading into (or out of) an area, one can begin by surrounding the area in a ring of cobblestone (or any other block not based on dirt), inset in the ground, and ideally 2 blocks deep. However, after doing so, it will still be necessary to dig out most of the area two layers deep, to remove any buried mycelium. If the cobblestone is not 2 blocks deep, the farmer should also check under the cobblestone.
Mycelium can also be made from dirt using a Moistener.