Mycena sanguinolenta is common and widely distributed. It has been found from Maine to Washington and south to North Carolina and California in the United States, and from Nova Scotia to British Columbia in Canada. In Jamaica, it has been collected at an elevation of . The distribution includes Europe (Britain, Germany, The Netherlands, Norway, Romania and Sweden) and Australia. In Asia, it has been collected from the alpine zone of the Changbai Mountains in Jilin Province, China, and from the provinces of Ōmi and Yamashiro in Japan.