Marasmius grandiviridis is a very distinctive and conspicuous bright green mushroom restricted to moist broad-leaf evergreen subtropical forests. It is known only from northern Thailand and southwestern China at elevations between 1200-1700 meters.  It is anticipated that the species can also be found in Laos and Myanmar in similar habitats. Suitable habitat is restricted to relatively few fragmented patches scattered across the region.
Given the intensity of fungal survey work in the area, the distinctiveness of the species, and the restricted habitat that the known records have been found, it is estimated that there are no more than 2,000 mature individuals. Loss of habitat due to conversion of forests into tea and coffee plantations or other agricultural practices has occurred and continues throughout the region results in a decline in the species population. The species is assessed as Endangered due to its small population size that is under continuous decline.

This species occurs in highland moist forests and is not often. And these known populations are limited. It is a rare species.

The species is known from 3 records from northern Northern Thailand, and 3 records from Yunnan, China. These areas have been surveyed for fungi by a number of mycologists over many years suggesting that the species is rare and restricted to higher elevations in moist evergreen broad-leaf forests.

The species was described in 2009 from Chiang Mai, Thailand. A total of 6 records are known, three each from Northern Thailand and southwest China. Given the intensity of fungal survey work in the area and the restricted habitat that the known records have been found it is estimated that there are no more than 2,000 mature individuals.

This species is saprobic fungus growing on broad leaf litter on the ground. Basidiomata are gregarious to cespitose in moist evergreen forest at high elevation 1200-1700 m. alt.

Loss of habitat due to conversion of forests into tea and coffee plantations or other agricultural practices has occurred and continues throughout the region.

Habitat protection.

Additional surveys are needed to determine the distribution and population size of the species.  Data on its ecology will help inform the understanding of its distribution and if the species is restricted to undisturbed sites.