Ghost Trees are found in the Organic section of player inventory.
How to Obtain
This tree grows from a bulb. When fully-grown, it can then be mined.
This tree can only be grown in hell worlds. To grow a Ghost Tree, first choose a spot where there is unobstructed sky above -- rain must be able to reach the bulb all the way from the very top of the sky. Then place the bulb against either earth background or a crafted backdrop block of any kind.
Ghost Trees have several stages of growth. When a tree is fully matured, the bulb will transform into a block of compost. You can then mine both the tree and the compost. Make sure to mine the tree first! Mining a tree before it's fully-grown will give you only flax in your inventory. Any tree that still has a bulb under it is not fully-grown.
Use trees to create gardens, or to brighten up building interiors.
To display this item, place it directly above either a block of compost or a flower pot. Be sure to place the compost or flower pot first, otherwise you will lose the item. Ghost Trees can be placed this way in any world, regardless of biome type or purity level.
The Ghost Tree is one of seven new bulbs introduced in the Winter 2015 horticulture update. Unlike other bulb-grown items up to this point, Ghost Trees are two blocks tall.