- Super Mushroom: Increases the fighter's size by one level.
- Mega Mushroom: Increases the fighter's size to its maximum.
- Poison Mushroom: Decreases the fighter's size by one level and lowers his/her stamina sightly.
- Golden Mushroom: Increases the fighter's speed for a fixed period of time.
- Star: The fighter becomes invincible for a brief period of time, and causes guard damage to the opponent regardless of his/her size.
A character's power and speed will change depending on their size. Also, the greater the difference between fighters, the more life is lost when guarding an attack. Once there is a difference of 3 sizes between the two, various effects will take place, including being unable to throw the opponent.
There are six stages in Mushroom Battle. Depending on their size and shape, the types of items featured, as well as their location and how often they appear will vary. Learning the features of each stage can give players an edge in battle.
By attacking a mushroom, it can be thrown towards the opponent. This way, Poison Mushrooms, which are usually a hindrance, can be used as an offense by throwing them at the other fighter.
- The music that plays in this mode are remixes of the Overworld, Underworld, and Underwater themes from the original Super Mario Bros. game. If one of the fighters collect a Star, the background music is replaced by the invincibility theme from New Super Mario Bros. Wii.
- The fighters' voices change along with their size, becoming more high-pitched if they get smaller, and getting deeper if they grow.