Investigation of Phaeocollybia in British Columbia, Washington, Oregon and California has led to a better understanding of the characters and biology of the genus as a whole. Generically significant characters – pseudorhizas, pellicular veil, tibiiform diverticula, and sarcodimitic tissues – are examined in depth with four variations of branched and unbranched pseudorhizal patterns outlined. Basidiome development is traced from subterranean initiation to fully mature emergent basidiomes. Hypotheses on the ontogeny of Phaeocollybia basidiomes and biological associations are developed based on extensive observations of primordia and numerous field excavations. Comparisons between rhizomorphs and the thread-like pseudorhizal extensions of certain species are made and the term ‘rhizomorphic pseudorhiza’ is introduced. Possible biological strategies are explored and evidence for consideration of Phaeocollybia as a mycorrhizal genus is presented.