The Underground consists of four layers: the dirt layer, the rocky dirt layer, the stone layer, and The Underworld . Ores, pots, and chests can be found throughout. Water is a common sight anywhere underground and Demon altars can be found within these layers, however it is a very rare occurrence. Demon altars tend to be found at 0 degrees altitude when not in the corruption. Lava becomes common near the bottom of the stone layer. Giant mushrooms have been seen as well (only in mushroom biomes). This is also the place to look for extra heart crystals as heart crystals are very vitalFile:2011-05-18 00003.jpgGiant cave mushrooms. to progress in the game.
You can tell when you have hit the underground when you hear a different music and when the background changes to an unbreakable rocky look. (You can place walls though.)
Note: Whoopie Cushions can be obtained by killing Giant Worms. Mushroom Grass Seeds are found in Mushroom biomes upon removing grass. Mushroom Grass Seeds can only be planted on mud.
Technical Note
In the dirt layer, one can place platforms and blocks freely on the back wall. This is not the case in the stone layer or below. You can only place blocks adjacent to other blocks, making pillaring the safest way out (unless you have a Grappling Hook, Ivy Whip or other flight/climbing item to use).
This may prove a problem for new players who've dug too deep. Instead of placing platforms (which require walls to the sides) it is advised that new players place dirt or other building materials below them to create a tower back up (Pillaring).