A saprobe or parasite, O. nidiformis is nonspecific in its needs and is compatible with a wide variety of hosts.
It has been recorded on native Banksia (including B. attenuata and B. menziesii), Hakea, Acacia, Nuytsia floribunda and various Myrtaceae, including Agonis flexuosa and Melaleuca species, and especially Eucalyptus, as well as Nothofagus, Casuarina species and Allocasuarina fraseriana, and even introduced trees such as Pinus or Platanus species.
It plays an important role in breaking down wood and recycling nutrients into the soil.

Omphalotus species cause a white rot by breaking down lignin in their tree hosts.
The fungus infiltrates the heartwood of the tree via a breach in its bark, either by a branch falling, damage from insects or mistletoe, or by mechanical damage from logging.
O. nidiformis has been implicated in the heartwood rot of several species of eucalypt around Australia, including marri (Corymbia calophylla) in southwest Western Australia, in spotted gum (C. maculata) and messmate (Eucalyptus obliqua) in New South Wales, and in blackbutt (E. pilularis), Sydney blue gum (E. saligna), red stringybark (E. macrorhyncha) and Forth River peppermint (E. radiata) in Victoria.

The US Department of Agriculture considers there is a moderate to high risk of O. nidiformis being accidentally introduced to the United States in untreated eucalyptus woodchips from Australia.
Nearly a century ago, Cleland and Edwin Cheel suggested that even though the fungus was of "no great economic importance", "it would be advisable to destroy it by burning wherever found."

Several species of Tapeigaster flies have been collected from the fruit bodies, including T. cinctipes, T. annulipes, and T. nigricornis; the latter species uses the fruit bodies as a host to rear its young.
Fruit bodies in Springbrook National Park have been observed to attract nocturnal insects such as beetles, native cockroaches and crickets (white-kneed cricket (Papuastus spp.)
and thorny cricket), as well as giant rainforest snails (Hedleyella falconeri) and red triangle slugs (Triboniophorus graeffei), which voraciously consume the fungus.
A saprobe or parasite, O. nidiformis is nonspecific in its needs and is compatible with a wide variety of hosts. It has been recorded on native Banksia (including B. attenuata and B. menziesii), Hakea, Acacia, Nuytsia floribunda and various Myrtaceae, including Agonis flexuosa and Melaleuca species, and especially Eucalyptus, as well as Nothofagus, Casuarina species and Allocasuarina fraseriana, and even introduced trees such as Pinus or Platanus species. It plays an important role in breaking down wood and recycling nutrients into the soil.
Omphalotus species cause a white rot by breaking down lignin in their tree hosts. The fungus infiltrates the heartwood of the tree via a breach in its bark, either by a branch falling, damage from insects or mistletoe, or by mechanical damage from logging. O. nidiformis has been implicated in the heartwood rot of several species of eucalypt around Australia, including marri (Corymbia calophylla) in southwest Western Australia, in spotted gum (C. maculata) and messmate (Eucalyptus obliqua) in New South Wales, and in blackbutt (E. pilularis), Sydney blue gum (E. saligna), red stringybark (E. macrorhyncha) and Forth River peppermint (E. radiata) in Victoria.
The US Department of Agriculture considers there is a moderate to high risk of O. nidiformis being accidentally introduced to the United States in untreated eucalyptus woodchips from Australia. Nearly a century ago, Cleland and Edwin Cheel suggested that even though the fungus was of "no great economic importance", "it would be advisable to destroy it by burning wherever found."
Several species of Tapeigaster flies have been collected from the fruit bodies, including T. cinctipes, T. annulipes, and T. nigricornis; the latter species uses the fruit bodies as a host to rear its young. Fruit bodies in Springbrook National Park have been observed to attract nocturnal insects such as beetles, native cockroaches and crickets (white-kneed cricket (Papuastus spp.) and thorny cricket), as well as giant rainforest snails (Hedleyella falconeri) and red triangle slugs (Triboniophorus graeffei), which voraciously consume the fungus.
Omphalotus nidiformis