Medicinal mushrooms have an established his story of use in the traditional oriental medicine. Many mushrooms especially belonging to the genus Auricularia, Flammulina, Ganoderma, Grifola, Lentinula, Tremella etc. have been found to possess medicinal properties. Ganodermalucidum is the most popular mushroom commercially used and traded in the world.India, bestowed with varied agro-climatic conditions, has tremendous potential for productionof a variety of commercial edible and medicinal mushrooms. There is increasing demand for quality products both in domestic and export markets. Country’s domestic market will expandon account of changing food habits, rising income and rapid urbanization. The world market has shown a significant growth in recent years making it more attractive for Indian exports.India with abundance of agricultural wastes, relatively cheap labour can thus be a potential mushroom producer in the world.