Blood Cavern is a dark, red cavern that is accessed by taking a boat found at the Blood Marsh. The music that plays in this area is "Spleen" by Ruth White.
In Space Funeral, Leg Horse demands Phillip to take him to Blood Cavern so he can speak to Wizard Grum about the fate of the world. After Leg Horse speaks to Wizard Grum, Phillip will then have a chance to speak with Wizard Grum but he must let the Wizard suck his blood. As a warning, this may result in a "Game Over" if Phillip says "Yes" three times. Wizard Grum will then tell Phillip to head to the City of Forms by going through Malice, the Mystery Forest, the Ghost Forest, and the Wastelands.
Upon exiting the room, Leg Horse will then decide to rejoin Phillip for personal reasons and since he senses that there is a great evil in the cavern. Before leaving the Blood Cavern, the protagonists are then attacked by a Blood Ghoul. Once they leave the cave to Malice, they cannot return as a deep, muffled groan makes them decide against it.