I bet there's a stump decomposing right there. That looks like wood rot fungus mushrooms. Did you get some rain recently?

All you have to do is let it dry out. The fungus will stay and rot the stump until it's gone. That process takes no more than 18 months from the time the stump first gets inoculated with the fungus and it takes off. I would not cover it with anything. If you cover it with soil, for example, nothing will grow there for decades because the stump is still there. Adding nitrogen will help speed it up, as hawksster said.

Thanks for your very informative responses, hawksster and dchall.

If you'll indulge me, I have more questions.

Though I looked at the "thing" only briefly, I didn't see that it was attached to any stump or piece of wood. It looked like it was simply on the ground, though it could be obscuring something below it.

Please help me understand a bit better. What is the downside of digging the thing up and disposing of it? Is the issue that the main fungus is underground, and it will just pop up again later? Can I get rid of the bulk of it by digging, and then use nitrogen fertilizer to accelerate the decay of the rest of it, as you mention above? I do find the big thing repulsive.

For whatever it's worth, my new house is located in Connecticut. From what I can tell, the area had about 10 inches of rain from May through August. Is that enough to cause this thing to grow from scratch...or has it clearly been this way for months? It will soon be Fall and Winter. Does this thing die in the winter? Should I just wait it out?

Is there anything that can be done generally to prevent mushrooms and fungus? Can one use fungicides liberally, or are they dangerous?

For the record, I understand that sometimes mushrooms/fungus can be a healthy part of the lawn ecosystem...but like I said, I just can't stand them.

There's definitely something underneath, I have some of those growing on an old stump, they like to grow on wood.

Daconil might help kill it.

Fungicides do cause harm to the soil life, but liberal use in that one area probably won't hurt anything.

Fungi are nature's decomposers and for the most part, they are harmless. And microscopic :-) What you are seeing is the fruiting body - mushroom - of some sort of probably benign fungal organism, similar to a flower or fruit produced by a plant. The reproductive system, as it were :-) Most often these are not really attached to anything, although now and again, you will find bracket or shelf mushrooms attached to trees that are dead or dying from heart rot.

A mushroom's appearance is usually a very temporary thing and associated with specific weather/climate conditions. If left alone, they will typically disappear after a few days. If you can't wait, go ahead and remove manually - no harm, no foul. However you will never be free of fungal activity........nor do you necessarily want to be. They are essential to soil health and fertility and in a much more significant way, to plant health - there are very few plant species on this earth that exist without some sort of symbiotic mycorrhizal fungal relationship.

Fungi are a fact of life. There are over 100,000 microbial species in your soil of which a very large fraction are fungi. As gardengal said, you will never be free of them and you don't want to be. Whether they are creating mushrooms is something else. You can minimize the mushrooms by proper watering.

Watering: Deep and infrequent is the mantra for watering. This is for all turf grass all over the place. Deep means 1 inch all at one time. Put some cat food or tuna cans around the yard, and time how long it takes your sprinkler(s) to fill all the cans. Memorize that time. That will be the time you water from now on. My hose, sprinkler and water pressure takes 8 full hours to fill the cans. Your time will likely be less. I like gentle watering. As for watering frequency, that depends on the daytime air temperature. With temps in the 90s, deep water once per week. With temps in the 80s, deep water once every 2 weeks. With temps in the 70s, deep water once every 3 weeks. With temps below 70, deep water once a month. Note that you have to keep up with quickly changing temps in the spring and fall. This deep and infrequent schedule works in Phoenix and in Vermont, so it should work for you. The reason for deep and infrequent is to grow deeper, more drought resistant roots and to allow the soil to dry completely at the surface for several days before watering again. If it rains, reset your calendar to account for the rainfall.