Phosphorescence — the process by which an object emits the energy it has absorbed in the form of an unearthly glowing light — is a characteristic not of the decaying wood itself but rather the mycelium which likes to colonize it. Certain species of honey fungus, ghost fungus, bitter oyster and the jack-o’-lantern mushroom are all possessed of this witchy property. The light they emit is green in color and, though usually dim, can sometimes be bright enough to read by. In folk usage, it is referred to as fox-fire or fairy-fire and was supposed to issue from the spirits of the dead who wished to lead unwary travellers astray.
Henry David Thoreau, the transcendentalist author, was a friend of Hawthorne's. In The Maine Woods (1864), he excitedly recounts discovering a piece of phosphorescent wood for the first time. Read the relevant extract here.
The time-lapse footage below shows bitter oyster fungus changing from its day to its night apparel.