These tiny mushrooms, Clorociboria aeruginosa, can be found on decaying wood in the Northeast. The blue fruiting bodies, cup shaped mushrooms which flatten as they age, appear in the summer/fall on barkless logs. In other seasons, only the blue/green stained wood is visible. Both the cups and the mycelium (fungi ‘roots’) contain a blue-green pigment called ‘Xylindein’ which permanently stains the wood it is growing in. This stained wood is sought after for use in decorative woodworking, producing what is known as ‘Tunbridge Ware’ and jewelry. (Wikipedia)