Cap 1.5-4.0 mm broad, at first hemispheric to convex, broadly convex in age; margin incurved, then decurved, minutely fringed; surface when moist, faintly striate-rugulose to near the disc, pubescent with a hand lens; color pallid, pale-pink, tan, to tawny-brown, occasionally olive-brown, the disc darker; context membranous, colored like the disc; fruiting body reviving after drying; odor and taste not distinctive.
Gills adnexed to adnate, subdistant, relatively thick, watery-white, edges fringed; lamellulae in two to three series.
Stipe 1.0-3.0 mm long, 0.5 mm thick, round, solid, straight or with a basal curve, equal to enlarged at the attachment point, sometimes anchored with radiating whitish hairs; surface pubescent, whitish to pale-tan, frequently tawny-brown to dark-grey below; partial veil absent.
Spores 4.5-5.0 x 2.5-3.0 µm, ellipsoid, thin-walled, slightly inequilateral in profile, hilar appendage conspicuous, hyaline in water, inamyloid; spore print not seen.
Gregarious on rotting cones of Pinus lambertiana (sugar pine), Pinus jeffreyi (Jeffrey pine), and Pinus ponderosa (Ponderosa pine), most commonly on sugar pine; found in montane regions in the spring shortly after snow-melt; common on its preferred substrate.
Edibility unknown, insignificant.
Strobilurus diminutivus shares a feature common to the genus (except for Strobilurus albipilatus), i.e. a cone-dwelling habit. A dozen tiny sporocarps may occupy a cone scale and hundreds may be found on a single cone of Pinus lambertiana (sugar pine). Despite this abundance, it is rarely collected because most fruitings are well hidden by overlapping cone scales. Strobilurus diminutivus is recognized by a pallid, pale-pink to tawny or dull-brown cap. The cap and stipe often have a fuzzy aspect when viewed with a hand lens due to the presence of cystidia. Strobilurus diminutivus is the only member of the genus in California that has the ability to revive after drying.
Two small snowbank mushrooms that bear a resemblance to Strobiluris diminutivus are Mycena adscendens and Collybia bakerensis. Mycena adscendens is similar in size, but has a white, unchanging cap ornamented with sugar-like granules, and a stipe with a disc at the base. Collybia bakerensis is a white to pale-pink species typically found on decaying wood or bark of Abies magnifica (red fir). It is usually larger, lacks pubescence when viewed with a hand lens, and does not revive after drying