Lawn Disease: Fairy Ring
A ring of mushrooms or one of dark green grass is a sign fairy ring disease has moved into the lawn.
The fairy rings can vary from a few inches to a few feet in diameter. This fungus feeds on old roots, thatch and stumps not the grass. It can, however, cause droughty patches in the lawn. The thick fungal mass prevents water from reaching the grass roots.
Living with the problem is the easiest solution. Water infested areas slowly, thoroughly and often enough to penetrate the fungal mat and combat drought stress. Rake or mow to destroy the mushrooms as they form to improve the appearance and reduce the temptation to kids and pets.
Determined gardeners can remove infested soil and replace with fresh disease-free topsoil. Carefully remove the soil 12 inches below and slightly wider than the ring being careful not to drop any infected soil on the lawn.
A bit more information: The name fairy ring is the results of many folktales and lore. Some cultures believe the fairy rings mark the spot where fairies danced while others believed there was a connection to witch dances and the devil.