In the 1970s, Stamets worked in the woods of Washington's northern Cascades in the lumber and shingle mills. One August day, a 4-foot-diameter tree succumbed to the stress of a skyline and broke into old-growth shrapnel; the shrapnel nearly hit Stamets' crew as the large old-growth knocked over several more trees in the forest. The crew survived the incident by positioning themselves behind a large Douglas Fir tree. That day, Stamets questioned his future as a logger and decided to go back to study botany at Evergreen State College. 
Studying at college, Stamets was fascinated by mycelium. As opposed to the idea at the time that mycelium grew on habitats, he believed it grew through the environment. The ability for mycelium to absorb tobacco smoke, ink, and water was astonishing. His idea of mycelium as a filtration system fell dormant until he purchased a small waterfront farm on Kamilche Point in Skookum Inlet, Washington.
After a few months of moving in, the sheriff visited Stamets with court orders to install septic systems within 2 years or vacate the land. After 1 year of installing his mycelium beds, before Stamets had even repaired his septic system, an analysis of his outflowing water showed dramatic improvement: a hundred-fold drop in coliform levels despite the fact he had more than doubled his population of farm animals. He found further use for mushrooms on his farm as he then found mushrooms that housed larvae. Putting those mushrooms in a silver salmon fish-tank, he noticed the fish learned to bump the mushrooms to dislodge the larvae and feed themselves. Stamets' mycofiltration experiments drew attention of researchers at Battelle Marine Science Labaratories, where more-formal studies ensued with mushrooms such as oyster and wood conk.
Research and advocacy
Stamets is on the editorial board of The International Journal of Medicinal Mushrooms (Begell House), and is an advisor to the Program for Integrative Medicine at the University of Arizona College of Medicine Medical School, Tucson, Arizona. He is active in researching the medicinal properties of mushrooms, and is involved in two NIH-funded clinical studies on cancer and HIV treatments using mushrooms as adjunct therapies. Having received 9 patents on the antiviral, pesticidal, and remediative properties of mushroom mycelia, his work has been called pioneering and visionary. A strong advocate of preserving biodiversity, Stamets supports research into the role of mushrooms for ecological restoration.
The author of numerous books and papers on the subject of mushroom identification and cultivation, Stamets has discovered four new species of mushrooms. He is an advocate of the permaculture system of growing, and considers fungiculture a valuable but underutilized aspect of permaculture. He is also a leading researcher into the use of mushrooms in bioremediation, processes he terms mycoremediation and mycofiltration.
Stamets was the recipient of the "Bioneers Award" from The Collective Heritage Institute in 1998, as well as the "Founder of a New Northwest Award" from the Pacific Rim Association of Resource Conservation and Development Councils in 1999. He was also named one of Utne Reader's "50 Visionaries Who Are Changing Your World" in their November–December 2008 issue. In February 2010, Paul received the President's Award from the Society for Ecological Restoration: Northwest Chapter, in recognition of his contributions to Ecological Restoration. His work was featured in the documentary film The 11th Hour. He has also been featured in the eco-documentary films Dirt! The Movie and 2012: Time for Change.
On June 10, 2014, Paul was honored with becoming an Invention Ambassador, by the American Academy for the Advancement of Science (AAAS). 
On June 17, 2014, he received U.S. patent 8,753,656: "Controlling zoonotic disease vectors from insects and arthropods using preconidial mycelium and extracts of preconidial mycelium from entomopathogenic fungi".
On July 1st, 2014, he received U.S. patent 8,765,138: "Antiviral and antibacterial activity from medicinal mushrooms".
Stamets runs Host Defense, a family-owned company that sells mushroom cultivation kits and supplies. Stamets has two children, Azureus and LaDena Stamets, and is married to C. "Dusty" Wu Yao. Paul Stamets is an accomplished martial arts athlete, holding a black belt in Taekwondo (1979), and also in Hwa Rang Do (1994).
- Mycelium Running: How Mushrooms Can Help Save the World (2005, ISBN 1-58008-579-2)
- MycoMedicinals: An Informational Treatise on Mushrooms (1999, ISBN 0-9637971-9-0)
- Psilocybin Mushrooms of the World (1996, ISBN 0-89815-839-7)
- Growing Gourmet and Medicinal Mushrooms (1996, ISBN 1-58008-175-4)
- Mushroom Cultivator, The (1983, ISBN 0-9610798-0-0)
- Psilocybe Mushrooms & Their Allies (1978), Homestead Book Company, ISBN 0-930180-03-8)
- KEXP Interview with Paul Stamets.
- Stamets, Paul (2005). Mycelium Running: how mushrooms can help save the world (3rd ed.). Berkeley, California: Ten Speed Press. p. 311. ISBN 978-1-58008-579-3.
- NPR "Smallpox Defense May Be Found in Mushrooms"
- Salon.com Technology: "How Mushrooms Will Save the World
- "Bioneers 06: Paul E. Stamets". LinkTV. 2006. Retrieved February 23, 2013.
- 11thhouraction.com Ideas and Experts: Paul Stamets
- The Participants | Dirt! The Movie, February 23, 2013
- 2012: Time for Change
- Paul Stamets on 6 ways mushrooms can save the world | Video on TED.com
- "Author Query for 'Stamets'". International Plant Names Index.
- Stamets's Bio at Fungi Perfecti
- Official website of Host Defense, Olympia, Washington
- Paul Stamets at the Internet Movie Database
- Stamets' TED talk, Stamets' TED Talk from March 2008
- Stamets' 2011 talk at TEDMED
- Mushroom Power, Stamets' article for YES! Magazine from March 2003