The objective of the present work was to use coffee industry residues, viz. coffee husk and coffee spent ground for the cultivation of edible fungus, L. edodes, with the aim of using these residues as substrate in bioprocesses for value-addition, and solve their disposal problem also. The work involved screening and selection of a suitable strain of Lentinus sp. and cultivating this strain in the SSC under different conditions of moisture and spawn rate. The fermented substrates were analysed for verifying the degradation of toxic substances (caffeine and tannins) by the fungal strain.