Commercial production of mushrooms represents unique exploitation of the microbial technology for the bio conservation of the agricultural, industrial, forestry and horticultural wastes into nutritious food. Mandi district was purposively selected for the study due to sufficient number of mushroom growers in the district. A sample of 60 growers was selected by proportional allocation method. For the selection of the sample two stage random sampling technique was adopted. The overall net returns per rupee of investment were more for large growers i.e. Rs 1.27. In order to understand the determinants of mushroom production, regression analysis was done using Cobb-Douglas production function. Three channels of marketing were followed by the growers in the study area but the (producer # retailer # consumer) was the most important and followed by 56.06% of growers through which 44.09% of mushroom produce was marketed. On overall farms, marketed surplus was 78.67% which varied from 56.96% on small farms to 86.38% on the large farms.