Psilocybe ovoideocystidiata is reliably associated with eastern North America, especially the Ohio River Valley and parts of the mid-Atlantic. Reports center on states such as Ohio, Pennsylvania, West Virginia, Kentucky, and nearby areas, which makes geography a useful first filter.
It typically fruits on woody debris, mulch, and flood-scoured plant material in riparian settings such as riverbanks, creek edges, and low floodplains. Finding it in spring on wood-rich debris near moving water helps narrow identification better than woodland location alone.