(http://www.freepicsupload.com/?di=10129131796414)
Dear Gmail, despite our everlasting love for thee, you do have your quirks. One of them, muting and unmuting conversations, has been broken and unusable since the dawn of time -- which is why I was so glad to hear that it's finally been fixed!
Now, when you mute a conversation, it actually stays muted! Crazy, I know. A conversation will only bounce back into your inbox if a message is addressed to you specifically -- great for mailing lists, or mass-CC email chains that just... won't... die. Accompanying the mute changes, there's also two new ways to unmute conversations, either via the 'More actions' drop-down, or by removing the 'Muted' label at the top of a conversation.
To enable the new muting functionality (dubbed "Smart Mute"), you need to head to the Labs tab in Gmail. It's near the bottom of the list.
source: Gmail Blog