The present status and operation of the mushroom industry in China are summarized in terms of environmental and economic cycles, variety diversity, breeding of high quality varieties, features associated with developing mushroom industry models, evolving cultivation techniques, health functions and environmental protection. The advantages enjoyed by China′s mushroom industry such as strain resources, raw material and labor resources, and varied climatic conditions are also explored. Problems relating to resource protection, new germplasm preservation and breeding, variety protection and associated policies and laws, the need to manufacture finished and highly processed mushroom products, industrialization, industrial clustering, optimization of industry structure, mycology training, lack of multi-skilled teams with different experience levels, and the need to foster reserves of talent are discussed. Projections are also made for the future development of China′s mushroom industry.