Studies have shown that wood-chip mulch can nearly double the rate tree growth during the few years after planting. Mulch even fertilizes as it breaks down. In the wild, the forest floor is naturally covered with a mulch made of decomposing leaves, twigs, branches and other plant matter. In the city, the most common tree mulch is made of wood chips and is available from a variety of sources, often at no charge. Contrary to popular belief, tree roots do not grow very deep.
Roots extend laterally.
Mulch should be spread in a circle as far around the base of a young tree as possible, but at the very least two or three feet out. If there's grass growing around a tree, don't worry about it. It's much, much, much better to let mulch compost the grass naturally rather than risk root damage by digging up the area first. Way Mulch should be spread out in the shape of a saucer, not a mound, as is the common mistake. The saucer shape will hold and distribute rain water to a tree's root more effectively.