Mycelium

Mycelium is a block that has a particle effect that resembles tiny spores being released constantly from the surface.

Obtaining
Mycelium can only be obtained by mining it using a tool with the Silk Touch enchantment. Otherwise it will drop dirt. A shovel is the fastest tool to collect it.

Natural generation
Mycelium generates naturally in mushroom biomes.

Effect on plants

 * Mushrooms can remain on mycelium blocks in any light level, unlike the situation on other blocks, where mushrooms are broken (dropping as items) during block updates in high light.
 * Huge mushrooms can grow on mycelium, just as they can grow on dirt or grass.
 * Mycelium cannot be tilled with a hoe to make farmland. Saplings, flowers, grasses, shrubs, ferns and sugar cane cannot be planted on it, and pumpkins and melons will not grow on it.

Spread
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 or any opaque block. Mycelium reverts to dirt when covered by one of the light-impeding blocks above and the light level at that block is below 4.

If there is a plant on a dirt block when mycelium spreads to it, the plant will pop out and drop as an item.

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.

Trivia

 * It is a common misconception that only mooshrooms can spawn on mycelium. This is not true; friendly and hostile mobs can spawn on mycelium just as on any other block. It is the mechanics of the mushroom biome that prevents other mobs from spawning. Relatedly, mycelium outside of a mushroom biome will not spawn mooshrooms.
 * The spore particle effect is called "townaura" in the game code.
 * In real life, mycelium is the mushroom's nutrient gathering web of thin threads known as hyphae. The entire mushroom, from the mycelium to the cap is made entirely of hyphae.