The cultivation of Agaricus bisporus with compost made from wheat (Triticum aestivum L.), rice (Oryza sativa L.), and reed (Phragmites australis Trin.) straw was investigated. Straw degradation was analyzed at the microscopic level, and the corresponding changes in the breakdown of different lignocellulose components during different phases of composting and mushroom production helped in understanding the yield-limiting factors of using different straws to grow mushrooms. The wheat straw compost resulted in the highest mushroom production and had the highest bioconversion efficiency. The rice straw was limited by the softer texture, which resulted in low-porosity and overdecomposed compost in the composting process and decreased the amount of available lignocellulose during mycelial growth. Although reed straw had the largest carbon resources, its utilization rate was the lowest. The hard structure, low water holding capacity, and high porosity increased the recalcitrance of reed straw to degradation and prolonged the composting time, which resulted in large N and C losses and an increased C/N ratio. Moreover, reed straw failed to transform into "ready-to-consume C" in composting. Therefore, a high C/N ratio and deficiency of available nutrition decreased the utilization efficiency of the lignocellulosic components by A. bisporus during mycelial colonization and mushroom production. The investigation revealed that degradability by and availability to microbiota and A. bisporus seemed to be the overriding factors for optimizing the composting process with different straw types.