This paper first analyzes the change tracks of price of cotton seed hulls from January 2010 to February 2012,as well as the supply and demand characteristics of cotton seed hulls in the past 10 years,and then uses gray correlation analysis to explore the influence of cotton seed hulls price changes on the market prices of edible fungi.The result shows that the range of cotton seed hulls price is larger in China; cotton seed hulls are in short supply,and such relationship between supply and demand in different regions shows a greater difference; edible fungi production is mainly dependent on cotton seed hulls and fluctuations of cottonseed hulls price have the significant impact on the market price of edible fungus.Consequently,this paper puts forward several suggestions on how to promote the development of edible fungus industry in China.First,scientific research should be strengthened to find a new recipe for edible base material and reduce the dependence of edible fungus production on cotton seed hulls; Second,trading centers should be established for cotton seed hulls to perfect trading mechanism of cotton seed hulls and stabilize cotton seed hulls price fluctuation and increase mushroom grower’s income; Finally,the imports of cotton seed hulls should be increased for more supply of cotton seed hulls from other countries.