Agriculture residues are the major source of lignocellulosic materials, which is best substrate for solid state fermentation of edible fungi such as P. sajor-caju. Zadrazil (1980) showed that P. sajor-caju has very high saprophytic colonizing ability and can degrade wheat straw efficiently. Bisaria et al. (1987) studied the growth of this mushroom on several different agricultural wastes, including paddy and wheat straws. Growing oyster mushrooms convert a high percentage of the lignocellulosic materials to fruiting bodies. Therefore, cultivation of P. sajor-caju on various agricultural residues offers high value products with nutritional and medicinal properties. Also, mushroom production gives additional or alternative income to farmers looking for a value-added product and a way to supplement farm income while making use of byproducts or co-products from other crops. In addition, mushrooms are excellent source of food to address the problem of malnutrition in developing countries like Nepal. Also, the demand of mushroom has been escalating due to changing consumer behavior, development and market expansions in recent times