Labyrinths are a part of the Twilight Forest world generation.
They are typically found under Clearings. Every labyrinth is comprised of two separate levels each with unique features. The first level is accessible from a small ruin somewhere in the clearing, or you may be able to find natural Caves nearby breaking into it. The second level of the Labyrinth is surrounded by Bedrock and only accessible from an iron-bard room in the first level.
They are built out of what is called Mazestone, a hard material found in bricks, mosaics, and blue-gray stone blocks. Wooden arches, Torches, and Iron Bars are the most common decorations.
Navigating a Labyrinth can be a challenge, they consist of twisty corridors, large rooms and occasional treasures stashed in dead ends. The Labyrinth includes some lighting but it is recommended to bring your own to cut down on spawns and to mark your way.
Minotaur Hideouts is a room that can be found that contain two chests, a minotaur spawner and a trap. They are often the source of many Minotaur coming at you during your adventure in the Labyrinth. There can be up to two of these rooms on each floor in every Labyrinth.
The Monsters that can found throughout the Labyrinth include Fire Beetles, Slime Beetles, Pinch Beetles, Maze Slimes, Cave Spiders, Creepers, Endermen, and Minotaurs. Maze Slimes and Minotaurs are unique to the Labyrinth.
There are many treasure chests in the Labyrinth, with several categories of treasure. Dead end treasure rooms are protected by Iron Bars and may be trapped. These chests include Maze Wafers, Blaze Rods, Ironwood Ingots, and occasionally Golden Apples and Steeleaf.
Inside the chests in the Minotaur Hideouts, they can contain the essential Maze Map Focus, which can be used to create a Maze Map and can include Iron Ingots, Steeleaf, Potions, and Ironwood Ingots, as well as full Ironwood and Steeleaf armor pieces.
For treasure inside the Minoshrooms room, see the Boss section.
Finally, there is a third category for all the best treasures. These treasures are said to lie within a secret vault that you will almost certainly need a Maze Map to find. The second level of a Labyrinth will contain a secret room that contains very valuable treasures such as the unique Mazebreaker, Emerald Blocks and Emeralds, some Steeleaf, some Ironwood, and occasionally an Ender Chest to stash these treasures in safely. You can also find highly enchanted armor, tools, and weapons within these treasures. Vault rooms are hidden by several layers of Mazestone and will have four large chests in the center. The four large chests will be heavily guarded by 16 wooden pressure plates which are resting on TNT. Sand will be resting on Mazestone that is above the wooden pressure plates, preventing easy entrance from the top. Entrance from the bottom is also difficult due to the bedrock floor. Great care should be taken when entering the secret room so as to not blow up the valuable loot. On the map this room shows up as a solid block of mazestone.
One way to get to the vault safely is punching through the Mazestone blocks with a high-grade Pickaxe one block above floor level and lined up at the 'middle' of the room in question. (according to the map) When you get to the room, mine a path around the edge to the left and right until you can claim all four chests. Do NOT break the pressure plates; the drop might land on another adjacent plate.
Minoshroom is located on the second level of every Labyrinth. They are stuck in their prison room which is sealed off by fence. It can be found holding a Minotaur Axe. It is recommended to make a hole in the fence on the second layer and attack from there. If you get too close the Minoshroom can still attack, so keep your distance from the fence while using this method.
Killing the Minoshroom yields its axe. There are four Chests containing items such as Maze Wafers, Iron Ingots, Charms of Keeping and Maze Map Focuses. Ironwood, Steeleaf and their equipment can be found as well.