The present invention provides a method for producing γ-aminobutyric acid by fermenting a rice medium from the preparation of a Cordyceps species and the application thereof. Firstly, water and an appropriate amount of rice medium are mixed together to form a fermentation broth. Secondly, add lactic acid bacteria to the fermentation broth. Then, the fermentation broth is fermented by both of the Cordyceps species retained in the rice medium and the lactic acid bacteria. Consequently, the γ-aminobutyric acid is produced. Moreover, the fermentation broth prepared by this method can be applied to a health food or drink.