To identify Melzer's Panellus, look for a large, strong odor and disagreeable convex pile that resembles dusty rye bread in appearance.

The cap is usually broadly convex, fan-shaped to shell-shaped, viscid, smooth, and lacking visible hairs (although they are present). The color is yellowish green to olive-buff with wavy margins. The flesh is thick and firm with whitish hairs that resemble a powder-like scale. The portions are fairly well separated, and tend to completely break away into smaller portions with age. The spores are sausage-shaped, smooth, and amyloid (starchy).

The mushroom is usually solitary on logs and humus piles, often found under large oaks and other hardwoods where ground cover and underbrush is prevalent.