Abstract: Background and Objective: Mushrooms are potent source of biologically active substances which have beneficial effect on human health. Many mushrooms contain polysaccharides which may boost human immune system. In the present study, polysaccharides were extracted and purified from two edible mushroom species, Pleurotus florida and Agrocybe cylindracea and their in vitro antioxidant activity and antimicrobial activity were investigated. Materials and Methods: Mushrooms samples were collected at Ooty, Tamil Nadu. The bacterial strains of Staphylococcus aureus , Klebsiella pneumonia and Escherichia coli, obtained from Microbial Type Culture Collection (MTCC) centre, Chandigarh. Results: The antioxidant activities of extracted polysaccharides were evaluated by Fe2+-chelating ability and hydroxyl radical scavenging assay. The Fe2+-chelating activity and hydroxyl radical scavenging assay of P. florida polysaccharides (P1) and A. cylindracea polysaccharides (P2) increased gradually with the increasing polysaccharide concentrations. The extracted polysaccharides showed stronger antioxidant activity compared to butylhydroxytoluene (BHT). Conclusion: The results of the present investigation clearly demonstrated that P. florida and A. cylindracea polysaccharides could be used as a good food supplements that would support for both natural antioxidant and antimicrobial action. The synthetic antioxidants such as BHT need to be replaced because of their potential health risks and toxicity . Therefore, the attention now has been shifted towards naturally occurring antioxidants. Results from this study indicated that extracted polysaccharides could be potentially used as a natural antioxidant.