A species of oyster mushroom called Pleurotus sajor-caju was use to develop mushroom mycelium nutraceuticals. It was grown on agar-agar media in big flask in the laboratory and harvested after growth of mycelium. It was dried at 320 c temperature in the incubator and ground to form a fine powder. It is then sterilized in an autoclave and encapsulated. Mushroom mycelium doses were incorporated in control diet and fed to albino rats inorder to find out the hypoglycemic and hypolipidemic effect.