In light woodland or forest edges, manured meadows, and often in grass. Also found in damp hollows within stable dune systems. Very variable in colour and form; possibly a species complex

References: 
Breitenbach & Kranzlin - Fungi of Switzerland;
Knudsen & Vesterholt (2012 second edition) - Funga Nordica;
Kit van Waveren - The Dutch, French and British Species of Psathyrella