Pholiotina cyanopus grows in lawns, fields, and grassy areas in temperate areas of North America, Europe and Asia. It can be found in Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hungary, Latvia, the Netherlands, Norway, Poland, Russia, Sweden, Switzerland, Ukraine and the United States. It has also been reported from the United Kingdom but these reports are doubtful. Within Canada, it has been found in British Columbia and Quebec. Within the United States, it has been found in Colorado, Michigan, New York, Oregon and Washington) Within Russia, it has been found in the Sakha Republic and the Sikhote-Alin mountains and . It is rare where it occurs.