Fireblossom

Fireblossom appears as a small, magma-colored flower. It grows on Ash Blocks in The Underworld and can be cut with virtually any weapon or tool, you can also plant it in Clay Pots using Fireblossom Seeds. Fireblossom is used in crafting two potions, the Obsidian Skin Potion and the Gravitation Potion.

Keep in mind as of 1.0.5 you can no longer harvest flowers or herbs out of Clay Pots with a standard bladed weapon; instead, use your Pickaxe and left-click on the flower or herb above the Clay Pot you wish to harvest out of.

A Fireblossom will bloom when it is in contact with Lava (the plant is not damaged by the lava). A blooming Fireblossom will take on an appearance like the one in the above picture (like an upright torch). Using Lava Buckets and Clay Pots in an enclosed area is one option to accomplish this; the clay pots are also immune to damage from lava, as well as both the clay pot and the seed can be placed/planted directly in lava! When in bloom, you can receive its seeds along with the plant itself when you harvest it.

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Update Info
1.0.5 - Added to the Game