The name Fairy Ring comes from an old folk tale…
People once believed that mushrooms growing in a circle followed the path made by fairies dancing in a ring.
During Florida’s summer months fairy rings most often occur after two or three days of rain followed by several days of dry sunny weather. Fairy rings grow where large quantities of organic matter, such as lumber, tree stumps, logs, etc. have been buried and are rotting in the yard or garden. The fungi use this material as a source of nutrition. The mushrooms, which can be different varieties, are the fruiting stages of these fungi. The fairy ring above is populated by the Chlorophyllum molybdites fungi commonly known as the Green Spored Parasol mushroom or Green Gill mushroom. This mushroom has a beige cap that can grow up to 5 inches in width — this mushroom’s gills are a green color, hence implied in the name Chlorophyllum.
WARNING: Mushrooms growing in fairy rings should be disposed of or destroyed immediately upon discovery. The fungus pictured above is Poisonous. It is NOT EDIBLE. Ingesting any part of them can cause nausea, vomiting, severe cramps and diarrhea — DO NOT EAT THEM!
There are three types of fairy rings: Type I rings have a zone of dead grass just inside a zone of dark green grass. Type II rings have only a band of dark green turf, with or without mushrooms present in the band. Type III rings do not exhibit a dead zone or a dark green zone, but simply have a ring of mushrooms present. The picture above is of a Type III fairy ring.
Eradication of Fairy Rings
Unfortunately, eradication of fairy rings is difficult if not impossible. Application of the fungicides azoxystrobin and flutolanil can inhibit growth of the fungus, but will not kill it. Destruction of the fruiting bodies does not stop the fungus from spreading (sort of like pulling oranges off your tree does not stop the tree from growing). Although it is possible to dig up and replace the soil in which fairy rings grow, the rings will reappear if their food source has not been removed. Fairy rings will disappear naturally once their food source is depleted.
Source: FLORIDA LAWN HANDBOOK: AN ENVIRONMENTAL APPROACH TO CARE AND MAINTENANCE OF YOUR LAWN