From the Super Mario Wiki
Little Fungitown is an immigrant Toad community built on giant Mushrooms in Mario & Luigi: Superstar Saga. The place is located at the far end of Teehee Valley, and the Mario Bros. have to cross Teehee Valley to get here.
This town is the first town in the known Mario places to have an actual hospital, in the Little Fungitown Embassy (the second one is a hospital operated by Doctor Toadley in Mario & Luigi: Bowser's Inside Story). Psycho Kamek lives here, and manages to hypnotize Luigi into believing he was Mario. Little Fungitown also has an arcade and the various shops and residences resemble Toad Houses. Hidden away in the southern part of town, Warp Pipe #7 can be used to traverse to Little Fungitown without having to cross the treacherous Teehee Valley. Mario won a minigame and ate an Invincishroom to get Bean Fever here. The future barrel game is here too. Invisible blocks are here containing Hoo Beans. When Luigi got out of Guffawha Ruins he came out of a pipe in a top corner of Little Fungitown. Popple is also eventually sentenced to community service in Little Fungitown.
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