Fungus in a yard kills grass and covers the soil, keeping other vegetation from growing. To get rid of it you must first stop watering the lawn, since fungus needs moisture to survive. After starting to dry out the lawn, spray a fungicide to help eliminate the growth. Once the fungus in gone, which may take a few weeks and a reapplication of chemicals, you will have to reseed the lawn to fill in the bare places.
Wait at least two weeks to ensure that the fungus is gone. There is no sense attempting to plant new grass if the fungus will attack it or prevent it from growing.
Rake the lawn to remove dead grass and roots. Bag the dead debris, since it might contain mold or fungus.
Aerate the lawn to incorporate oxygen into the soil.
Sprinkle a little top soil over the lawn, especially if you are working with clay soil. This gives the seeds a foundation that you know is fertile. It helps build up a thin layer of good top soil, and will only improve your lawn.
Read the package to see how much of your type of seed you need to use for overseeding. Fill a seed spreader with half of the recommended quantity.
Push the spreader across the lawn in rows to spread the first half of the seed. When the spreader is empty, fill the spreader with the rest of the seed and walk across the lawn in rows that cross the first rows.
Water the lawn as soon as you finish seeding, provided it isn't evening. Do not water the lawn in the evening, since this promotes fungus and mold growth. Water only in the mornings so the lawn has time to dry during the day. Water until the soil is damp to a depth of about 2 inches; 15 or 20 minutes should be enough time. Continue to water daily until you see grass growing, then back off to twice a week to give the grass 1 inch of water per week.