The Wake-Up Mushroom is an item in The Minish Cap. It is bought from Syrup later on in the game. This odd fungus is needed to wake up Rem the shoe maker who suddenly falls asleep in his shop within Hyrule Town.
When Link first attempts to move through Castor Wilds, he is stopped in his tracks for the swampy terrain causes him to sink, and in response Ezlo explains that at his current pace the young hero has no chance of making it through the area, and with that said, the two of them leave the area to find a way to get across the swampland at a much quicker speed. Heading back to Hyrule Town, Link soon decides to check out the local shoe shop, however upon entering the building he sees the shoe maker named Rem doze off. This in turn causes him to knock a pair of shoes off his desk, which opened up a miniature pathway leading up to the table's top.
After shrinking the young hero quickly uses this newly opened route to speak with the Minish positioned up there. The Minish here explain that it is in fact them who do most of the work in regards to the shoe making that goes on in the shop, but once Link mentions needing to get across the Castor Wilds quickly, one of them chimes in saying he needs some Pegasus Boots. These Minish then state that while they had just made a pair of these boots while Rem was sleeping, they won't be done until the shoe maker himself puts the finishing touches on them, and that if the young hero wishes to wake Rem up he'd have to go purchase an item from Syrup. The Minish then mark the location of Syrup's Hut on Link's map and the young hero was on his way, soon afterwards purchasing the Wake-Up Mushroom and returning to the shop with it, as soon as it was presented to Rem he wakes up and questions where the terrible odor was coming from. Upon seeing Link there with the Wake-Up Mushroom, Rem thanks the young hero for waking him up and gets to work on finishing the Pegasus Boots that were apparently made in his sleep, and once done he gives them to Link as a token of appreciation.