Removing wild mushrooms from lawns may be desirable because some are poisonous and there may be concerns children might eat them. Another reason is they may be unsightly. Wild mushrooms, however, do not harm lawns. The fungi can actually be beneficial to lawns because they help decompose organic matter such as dead leaves.
Fungicides and mushrooms
Mushrooms are the fruiting structures of fungi. The fungi may live in the lawn soil for years without producing mushrooms until favourable conditions, such as excessive thatch and prolonged wetness, cause the mushrooms to grow. Small spores from mushrooms are carried by wind and spread the fungi to lawns and other sites. Fungicides do not control the mushrooms themselves, so you need to use cultural methods to control them.
You can pick mushrooms by hand or dig them out from the lawn to kill them. But that doesn't alter the favourable conditions that have caused the mushrooms to grow. Mushrooms grow in excessive thatch that is made of decaying stems, leaves and other organic matter, such as dead roots. Remove the lawn thatch the fungi is feeding on to keep mushrooms from sprouting. If fungi are feeding on dead roots, dig up the roots and remove them. Aerating the soil will improve water penetration and reduce wet conditions that help fungi produce mushrooms.
Applying nitrogen fertiliser to the lawn will help speed decomposition of organic matter that fungi feed on to produce mushrooms. The nitrogen in the fertiliser should be immediately released into the soil, so avoid slow-release or water-soluble nitrogen fertiliser -- use ammonium sulphate and other specialist fertilisers for this purpose.
Circular or semicircular rings of grass in the lawn may be caused by fairy ring fungi. Mushrooms may or may not be growing in the ring. A fungal mat may form in the ring that is so heavy that water can't penetrate it and grass inside the ring may die because it can't get water. Aerating the affected area will break up the fungal mat and allow water to move through the soil. Thoroughly water the treated area afterwards and remove the soil cores. If the fungal mat is deep, sse a small augur or shovel to break up the mat. Remove the infested soil and replace it with fresh soil that has little organic matter in it for the fungi to feed on.