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The Mushroom, also known as Green Mushrooms, have a counterpart named the Red Mushroom which are easier to obtain but restore only hunger, not thirst and health.
Three Mushrooms can be used in an Alchemy Station to craft a MaxHealth Potion. The Mushroom also heals the player for 50 points when eaten, and grants 2 points of hunger. They can be obtained by killing a Mushroom Guy or a Scorpion, or by finding them in a Gift Box.
The Mushroom restores the second most health out of any edible item in the game. This makes it extremely valuable to people who fight enemies often.
Alpaca Land has a cave for Mushroom Guys and a desert next to it which has Scorpions. This can be used to get Mushrooms fast