The oyster mushroom, Pleurotus ostreatus, is a common edible mushroom. It was first cultivated in Germany as a subsistence measure during World War I and is now grown commercially around the world for food. However, the first documented cultivation was by Kaufert. There is some question about the name Pleurotus corticatus, but no question he cultivated an oyster mushroom. It is related to the similarly cultivated "king oyster mushroom". Oyster mushrooms can also be used industrially for mycoremediation purposes. The oyster mushroom may be considered a medicinal mushroom, since it contains statins such as lovastatin which work to reduce cholesterol.
The oyster mushroom is widespread in many temperate and subtropical forests throughout the world, although it is absent from the Pacific Northwest of North America, being replaced by P. pulmonarius and P. populinus. It is a saprotroph that acts as a primary decomposer of wood, especially deciduous trees, and beech trees in particular. It is a white-rot wood-decay fungus.
The standard oyster mushroom can grow in many places, but some other related species, such as the branched oyster mushroom, grow only on trees.
Source: en.wikipedia.org/wiki/Pleurotus_ostreatus - 18.09.2011
Here we can see beautifully the different habits of the Oyster Mushroom from the young to the full-grown fruiting body.