Abstract: The sheathing leaves of Zizania latifolia, which contained 4 times higher in organic matters and twice more nitrogen than the rice straw, was seen as an excellent potential substrate material for mushroom cultivation.Our experiment by adding the sheathing leaves of Z.latifolia to the traditional compost formulation in growing Agaricus bisporus indicated that increasing the sheathing leaves in the medium slowed the hyphae running, delayed the pinning to 3 days, and postponed the mushroom harvest up to 4 days.The optimal results appeared to be when 50% sheathing leaves and 50% rice straw were used in combination for the formulation.Using the formulation, (a) the mushroom yield in one growing season reached 20.45 kg·m-2, approaching the same level as the traditional formula (Control) ; (b) the output/input ratio was 4.479, which was higher than 3.439 for Control;and, (c) there was no appreciable differences from Control on the single fruit weight or the characteristics of the fruiting body.Thus, the substitution seemed economically viable.And, at the same time, the practice could alleviate the rice straw shortage in major mushroom producing areas, and materially reduce waste and pollution caused by the disposal of the sheathing leaves.