Mushrooms are an important food crop for many millions of people worldwide. The most important edible mushroom is the button mushroom (Agaricus bisporus), an excellent example of sustainable food production which is cultivated on a selective compost produced from recycled agricultural waste products. A diverse population of bacteria and fungi are involved throughout the production of Agaricus. A range of successional taxa convert the wheat straw into compost in the thermophilic composting process. These initially break down readily accessible compounds and release ammonia, and then assimilate cellulose and hemicellulose into compost microbial biomass that forms the primary source of nutrition for the Agaricus mycelium. This key process in composting is performed by a microbial consortium consisting of the thermophilic fungus Mycothermus thermophilus (Scytalidium thermophilum) and a range of thermophilic proteobacteria and actinobacteria, many of which have only recently been identified. Certain bacterial taxa have been shown to promote elongation of the Agaricus hyphae, and bacterial activity is required to induce production of the mushroom fruiting bodies during cropping. Attempts to isolate mushroom growth-promoting bacteria for commercial mushroom production have not yet been successful. Compost bacteria and fungi also cause economically important losses in the cropping process, causing a range of destructive diseases of mushroom hyphae and fruiting bodies. Recent advances in our understanding of the key bacteria and fungi in mushroom compost provide the potential to improve productivity of mushroom compost and to reduce the impact of crop disease.