To develop the commercial cultivation of Pholiota adiposa, experiments were carried out using a substrate of sawdust and rice bran which has been conventionaly used as the basal substrate in most mushroom farms of Flammulia veltipes in Japan. A mixture of ingredients (sawdust, rice bran, and water) was placed in 800 ml polypropylene bottles (9 cm in diameter, 16 cm deep), which were sterilized at 100°C for 6 hr. Then the seed spawn was inoculated to the medium. The spawn-run was best on a substrate containing sawdust and rice bran in a ratio of 5 : 1 (v/v) with about 70% water. The mycelia grew fastest at 20-25°C, but an ambient air condition with 50-70% RH at 18°C in the dark was fairly good for a stable spawn-run. A combination of the above conditions completed the most favorable spawn-run with 23 days. Either paper covers or polypropylene caps with side crevices for the bottle could be used, but airtight covers inhibited the growth.