A circular concept involving use of faba bean hulls for production of oyster mushrooms (Pleurotus ostreatus (Jacq.) P. Kumm.) and the post-harvest residues for feed purposes was evaluated. Faba bean hulls are a waste remaining after the beans are dehulled to decrease the content of anti-nutritional factors and increase the food value of the beans. Faba bean hulls proved very suitable as substrate for production of oyster mushrooms, with biological efficiency of 109 ± 28%. The fruiting bodies produced were comparable to commercially sold mushrooms in terms of morphology, protein content, protein quality, and chemical composition. After mushroom harvest, 48.4 ± 0.6% of initial dry weight (dwt) of the substrate remained and showed significant changes in proximate composition, with an increase in protein concentration from 207.9 ± 8.6 to 346.6 ± 16.5 g kg−1 dwt and a significant increase in 14 of 16 amino acids analyzed, including methionine. Concentrations of the anti-nutritional compounds vicine and convicine were below the detection limit after mushroom harvest, while their initial concentration was 5.7 ± 0.1 and 1.4 ± 0.04 g kg−1 dwt, respectively. Tannin concentration was reduced by approximately 50%, to a final level of 9.0 ± 1.6 g kg−1 dwt. Comparison of the spent mushroom substrate with a commonly used feedstuff for pigs indicated potential for the spent substrate to be a valuable protein source in pig diets. This study demonstrates the potential for achieving complete circular use of agro waste and has implications for development of production systems well suited in the biobased society.