Mycelium growth and yield of irradiated grey oyster mushroom Pleurotus sajor-caju by gamma rays was investigated due to effects of irradiation. In order to establish the effect, mycelium of P. sajor-caju was irradiated by gamma rays at dose 0.1 to 0.6 kGy with dose rate 0.227 Gy sec-1 at the radiation facility in Malaysian Nuclear Agency. The radiation effects were evaluated on growth rate of irradiated mycelia, induction of different mycelia types, colonization period on substrate, size of fruit bodies and mushroom yields. The results shown that growth rate of irradiated mycelium were slightly slower than the control and decreased as the dose increased. Irradiation was found can induced more fruit bodies with no significant different on size of fruit bodies. The mushroom yield represented by BE of irradiated mycelium is higher than control and increased as the dose increased. Irradiation was found sufficient to increase the yield of mushroom and it is directly to support local mushroom industry.