Well its simple. Just go on create new world and go to more world options... once there type in the word "Lost" and once you create the world simply go to the dirt with purpilish brown stuff on it. Keep following the stuff and you will find mushroom island p.s. i tried this on 1.2.4 and it worked. Im awesome
Reply:Yeah hes so awesome :)Chat with our AI personalities
Like other biomes, you just have to go look for one. You may have to walk a while to find one in a previously generated world, because they will only appear in chunks generated after 1.2.1.
To farm mushrooms, dig a room underground and plant the mushrooms in the stone. Wait a few ingame days and you will notice that more mushrooms have spawned around the ones you have planted.
You can find them under trees, overhangs, or any shady spot. It sucks that you can't put bonemeal on them to grow to mushroom trees.