Mushroom Grass Seeds

Mushroom Grass Seeds are a type of Seed that has a chance to drop from harvesting Glowing Mushrooms, and can be used to grow your own Glowing Mushroom farm.

Requirements
Mushroom Grass Seeds must be planted on Mud Blocks underground (below 0ft depth) in order to grow Glowing Mushrooms. Once the seeds have been planted in a suitable location, the blue grass from the seeds will spread.

Since patch 1.0.5, otherwise unsupported mud blocks have a chance to fall down whenever a nearby block is updated, which includes when grass spreads to them or a mushroom grows. Once the grass has actually spread to the block, however, it will no longer fall unless the grass is subsequently removed. You may wish to use wooden platforms or other blocks (eg. stone) beneath the mud blocks for support, at least until the grass spreads to them.

Mushroom grass does not require water.

Grass
Mushroom Grass spreads much slower than ordinary Grass or Corruption, at a speed comparable to Jungle Grass, which is only 3-5 tiles per day for each contiguous section of mud blocks. The blue grass, as well as the mushrooms that grow on it, give off a nice level of light; less than a torch but enough to see clearly (when placed against a solid wall, the light will penetrate 2 solid blocks).

Also note that the blue grass seems to spread faster when it isn't lit up by any other light source but its own.

Trees
Glowing Mushroom Trees can also spawn in player-grown Glowing Mushroom farms; however the mud blocks must then be placed far enough below ground level (20-30 tiles) that the tops of the eventual trees will still be below ground level. They also require the same amount of vertical clearance.

The requirements for trees means less mushroom yield, since mud strips can't be placed densely on top of each other with just 1 tile of clearance as usual. Nevertheless, trees are aesthetically pleasing, have a high chance of dropping more Mushroom Grass Seeds, as well as multiple glowing mushrooms each, so they may be worth the trouble for some players. Glowing Mushroom Trees must be chopped down with an Axe.