From the Super Mario Wiki
A Reverse Mushroom is one of the rarest types of Mushrooms in the Mushroom Kingdom. It is the opposite of a Super Mushroom, causing someone who is enlarged to shrink and vice versa. This mushroom can be used against foes.
It made its debut in the Battle Mode found in the main menu of Super Mario Bros. 3 (Super Mario All-Stars version), where it would reverse the two players positions on the screen or reverse their super/small forms.
This rare mushroom also appears in Mario Party 3. It is green with a red U-turn symbol on it. The player who has it can make any player on the board (including himself/herself) go in reverse when they are moving across it, until they reach a fork or area with multiple paths, then the person inflicted can choose to go forward in another direction, or still go backwards. It is Donkey Kong's favorite item.
The Reverse Mushroom was exclusive to Mario Party 3, and no similar items have appeared in any of the following Mario Party games.