Rhodotus palmatus is saprobic, meaning it obtains nutrients from decomposing organic matter.
It grows scattered or clustered in small groups on rotting hardwoods, such as basswood, maple, and especially elm; in Europe it is known to grow on horse chestnut.
The mushroom prefers low-lying logs in areas that are periodically flooded and that receive little sunlight, such as areas shaded by forest canopy.
A pioneer species in the fungal colonization of dead wood, it prefers to grow on relatively undecayed substrates.
It is often found growing on dark-stained wood, especially the dried-out upper parts of trunks that have lost their bark.
R.  palmatus tends to fruit in cooler and moister weather, from spring to autumn in the United States, or autumn to winter in Britain and Europe.

Described as having a circumboreal distribution, R. palmatus has been reported from Canada, Iran, Hungary, Italy, Poland, Slovakia, Denmark, Sweden, Norway, Germany, the area formerly known as the USSR, Korea, Japan, and New Zealand.
In the United States it has been found in Indiana, and elsewhere in eastern North America.
Although often described as "rare", a 1997 study suggests that it may be relatively common in Illinois.
It has been suggested that an increase in the number of dead elms, a byproduct of Dutch elm disease, has contributed to its resurgence.
Rhodotus palmatus is saprobic, meaning it obtains nutrients from decomposing organic matter. It grows scattered or clustered in small groups on rotting hardwoods, such as basswood, maple, and especially elm; in Europe it is known to grow on horse chestnut. The mushroom prefers low-lying logs in areas that are periodically flooded and that receive little sunlight, such as areas shaded by forest canopy. A pioneer species in the fungal colonization of dead wood, it prefers to grow on relatively undecayed substrates. It is often found growing on dark-stained wood, especially the dried-out upper parts of trunks that have lost their bark. R.  palmatus tends to fruit in cooler and moister weather, from spring to autumn in the United States, or autumn to winter in Britain and Europe.
Described as having a circumboreal distribution, R. palmatus has been reported from Canada, Iran, Hungary, Italy, Poland, Slovakia, Denmark, Sweden, Norway, Germany, the area formerly known as the USSR, Korea, Japan, and New Zealand. In the United States it has been found in Indiana, and elsewhere in eastern North America. Although often described as "rare", a 1997 study suggests that it may be relatively common in Illinois. It has been suggested that an increase in the number of dead elms, a byproduct of Dutch elm disease, has contributed to its resurgence.
Rhodotus