Being coprophilous, "C. stercoreus" grows on dung, in soil with dung, and bonfire sites; it has also been recorded growing on sand dunes. The fungus is known to have a worldwide distribution, and Curtis Gates Lloyd, in his monograph on the Nidulariaceae, wrote that it "probably occurs in every country where manure occurs". When a drop of water hits the interior of the cup at the appropriate angle and velocity, the peridioles are ejected into the air by the force of the drop. The force of ejection tears open the purse, and results in the expansion of the funicular cord, formerly coiled under pressure in the lower part of the purse. The peridioles, followed by the highly adhesive funicular cord and basal hapteron, may hit a nearby plant stem or stick. The hapteron sticks to it, and the funicular cord wraps around the stem or stick powered by the force of the still-moving peridiole. After drying out, the peridiole remains attached to the vegetation, where it may be eaten by a grazing herbivorous animal, and later deposited in that animal's dung to continue the life cycle. A number of polyketide-type antioxidative compounds, cyathusals A, B, and C, and pulvinatal have been isolated and identified from the liquid culture of "Cyathus stercoreus". Furthermore, the polyketides known as cyathuscavin A, B, and C (isolated from liquid culture) also have antioxidant activity, and have DNA protection activity. While inedible, the species has other uses. In Traditional Chinese medicine, a decoction of this fungus is used to help relieve the symptoms of gastralgia, or stomach ache. "Cyathus stercoreus" has been investigated for its ability to break down lignin and cellulose in agricultural byproducts, like wheat straw or grasses. It selectively breaks down lignin, leaving much of the cellulose intact, which increases the amount of digestible carbohydrate for ruminant mammals, and enhances both its value as a food source and its biodegradability. The enzymes responsible, laccase and manganese peroxidase, also have industrial applications for lignin degradation and removal in the pulp and paper industry. Liquid cultures of "C. stercoreus" have also been shown to biodegrade the explosive compound 2,4,6-trinitrotoluene (TNT).