Paddy is the subsistence crop and grown as a major cereal in about 65 per cent of the total cultivable area in Angul district. For capacity building of the farmers, Krishi Vigyan Kendra conducted 16 training programmes, 8 demonstrations including 78 beneficiaries, entrepreneurs meet, field days, exhibitions, mushroom Melas etc over last 5 years covering technical financial and marketing aspects of mushroom cultivation. In the year 2016–17 the mushroom production increased gradually and reached to 1288 MT and proved as a promising enterprise for the district. Initially, 12 units were established having the adoption rate of 10 per cent in 2011 and later on increased to 72 units with adoption rate of 52 per cent. The objective of the study was to analyze cost benefit of mushroom production and to evaluate socio-economic constraints faced by farmers in adoption of the technology. It was found that the perishable nature of commodity (60%) and non-availability of quality spawn (55.8%) were the main problems for entrepreneurship in mushroom farming and it could be successful only if cold storage and packaging facility in paddy straw mushroom were given due importance. Hence, it can be concluded that mushroom cultivation is one of the most potential income generation activity with the remarkable diversity.