Purpose Genetic variability in white button mushroom cultivars is very low due to the life cycle. Induction mutations using gamma irradiation is a useful way to generate diversity in white button mushrooms to obtain genotype(s) with desirable traits. Methods Gamma irradiation Cobalt-60 was used for inducting genetic diversity in white button mushroom to obtain genotype(s) with desirable traits. Gamma irradiation with doses of 0-500 Gy was conducted on spores on Potato Dextrose Agar medium. Results The results showed significant differences in days to pin production and harvest, fruit body number, fresh and dry weight, yield, laccase, and manganese peroxidase enzyme activity. After isolating variants, 15 variants were selected on the base of their high yield and enzyme degradation activity. Their genetic variation was confirmed by Sequence Related Amplified Polymorphism (SRAP) markers, and then incubated on three types of substrates (50:50, 75:25, and 100:0 % compost: raw straw). The results showed that all variants, except GR18, colonized in 75:25, and GR3, GR4, GR9, GR61, GR72, and GR74 variants colonized in 50:50. In 100:0 substrate, GR55 and GR63 were the earliest variants, and GR9 produced the highest fruit body number. In 75:25 substrate, GR9, GR3, GR61, GR4, GR74, GR4, GR61, and GR72 showed higher yields. The highest laccase and manganese peroxidase activity were recorded in GR3, GR4, GR9, GR72, and GR61. The isolated 15 variants were clustered into two main groups by cluster analysis and genetic variation was confirmed by SRAP markers. Conclusion The results showed that the diversity in the white button mushroom could be improved using gamma rays, and the variation would be useful for the development of future breeding programs.