The species was first described as Cortinarius hochstetteri in 1866 by the Austrian mycologist Erwin Reichardt, before being given its current binomial in 1962 by Greta Stevenson. It is named after the German-Austrian naturalist Ferdinand von Hochstetter.

In 1976 Egon Horak combined Entoloma hochstetteri and Entoloma aeruginosum from Japan with Entoloma virescens, first described from the Bonin Islands in Japan.

In 1989 S. Dhancholia recorded E. hochstetteri in India. In 1990 Tsuguo Hongo from Japan examined E. hochstetteri and E. aeruginosum and concluded that they were different taxa, because of difference in the size of the spores and the shape of the pseudocystidia.

In 2008 Horak recognized E. hochstetteri as a different species from E. virescens, while noting that “it is open to speculation” whether taxa such as E. virescens are the same species.

A similar mushroom is found in Australia and mycologists differ as to whether it is E. hochstetteri, E. virescens or a separate species.

The species represents cultural value and is present in symbols of New Zealand society such as banknotes, has a fragmented distribution due to its presence on islands and continents, being more susceptible to population changes.

Entoloma hochstetteri is known from 3 countries found in tropical —the Indian specimen is not included in GBIF, but is reported in ???? (citation).  The species has been reported to associate with Uapaca spp. ( Phyllanthaceae), forming ectomycorrhiza with this tree.

There are 637 species recorded from Australia (subpopulation) and New Zealand (principal population) in Gbif data, however other individuals were recorded from south India but no refereciad in Gbif database. Most records are from New Zealand.  It is unclear whether the reports from India and Australia are of the same species or whether E. hochstetteri is endemic to New Zealand.  Population trends are not known.

Entoloma hochstetteri  is common in forests across New Zealand, where it grows in the ground between litter in the broadleaf forest / podcarp. Fruits from January to July. It has been reported to be ectomycorrhizal with Uapaca   spp. ( Phyllanthaceae).

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Research into the taxonomy of the species to determine if the reports from India and Australia are the same species.  Further sampling accross southeast Asia better understand its distribution and habitat.

Although many members of the genus Entoloma are poisonous, the toxicity of this species is unknown. It has been investigated to see if its blue colouring might be manufactured as a food dye.

Horak, E. (2008). Agaricales of New Zealand 1: Pluteaceae (Pluteus, Volvariella), Entolomataceae (Claudopus, Clitopilus, Entoloma, Pouzarella, Rhodocybe, Richoniella). Fungi of New Zealand / Ngā Harore o Aotearoa. 5. Hong Kong: Fungal Diversity Press. pp. 148–151. ISBN 978-9-88-993201-5.

Dhancholia S. (1989). “Entoloma hochstetteri (Agaricales) - a new record from India. Current Science 58 (3): 146–7.

Hongo, Tsuguo (1990). “New and Noteworthy agarics from New Zealand”. Reports of the Tottori Mycological Institute. 28:129–34.