The addition of mushroom substrate evidently increased CO2 production and dehydrogenase activity. The combined addition of mushroom substrate and wheat straw significantly improved the compost quality in terms of temperature, organic matter degradation and germination index, especially, reduced NH3 emission. The mushroom substrate could create a comfortable environment for the nitrifying bacteria and improve nitrification. The carbohydrates from combined addition of mushroom substrate and wheat straw could be utilized by thermophilic microorganisms, stimulate ammonia assimilation and reduce NH3 emission. Adding mushroom substrate and wheat straw could not only improve the degradation of organic matter and the quality of compost product, but also stimulate ammonia assimilation and reduce ammonia emission.