It has been postulated that mushroom has beneficial effect of lowering blood glucose and cholesterol in diabetic subjects. The literature so far searched and found that there was no published data in this regard. This study was undertaken to assess the effect of reducing blood glucose, cholesterol and triglycerides in diabetic patients. Additionally, this study addressed whether there was any hepatic and renal toxicity of mushroom. This clinical investigation was conducted in BIRDEM hospital from July 2005 to January 2006. Eighty-nine subjects were recruited. Baseline investigations included height, weight, blood pressure (SBP, DBP), plasma glucose for fasting (FPG) and 2-h after-breakfast (2hPG), total cholesterol (T-chol), triglycerides (TG) and high-density lipoprotein (HDL-c). Twenty- four days’ study constitutes 7-days mushroom, 7-days no mushroom and then 7-days mushroom. Investigations were done at the start and each after every 7-days. Thirty subjects (M / F = 17 / 13) followed to ensure full compliance with the designed protocol for 24 days. The mean (SD) age of the participants was 46.3 (10) years. Mushroom significantly reduced systolic and diastolic blood pressure (SBP, p<0.01; DBP, p<0.05). It also lowered both plasma glucose significantly (FPG & 2-hPG, p<0.001). Mushroom also lowered total cholesterol and TG significantly; whereas, there was no significant change in weight and HDL-c. When mushroom was withdrawn, there were significant increases of DBP, FPG, 2hPG, T-cholesterol and TG, whereas, no significant change was observed in weight, SBP and HDL-c. Restarting mushroom there was again significant reduction of blood glucose, TG and cholesterol. We conclude that mushroom significantly reduced blood glucose, blood pressure, TG and cholesterol of diabetic subjects without any deleterious effect on liver and kidney. The effect of mushroom may be investigated in a large sample for a longer duration to evaluate its efficacy and toxicity.