The fungus was described as new to science in 1963 by mycologists Lexemuel Ray Hesler and Alexander H. Smith in their monograph on North American species of Hygrophorus. Hesler collected the type on July 28, 1958 in Cades Cove, Great Smoky Mountains National Park (Tennessee). The fungus was recorded from the same location in a fungal survey conducted about 50 years later. It was transferred to the genus Hygrocybe in a 1998 paper by Ingeborg Kronawitter and Andreas Bresinsky. In this publication, the basionym was given as appalachiensis instead of the original spelling appalachianensis, and so Hygrocybe appalachiensis is an orthographic variant spelling. A reference to the type locality-the Appalachian Mountains-appears in both the specific epithet and in the common name, Appalachian waxy cap.