Mushroom cultivation and consumption is increasing in this modern world. Mushroom is a form of plant life and considered as one of the useful and delicious member of the vegetable kingdom. Utilization of dried & powdered oyster mushrooms into traditional foods has increased these days. Papad is the one of most popular Indian snack consumed either after deep-fat frying or roasting and it is one such snack where mushroom powder can be added. For the present study, experimental papads were prepared using oyster mushroom powder at 10% (E1), 15% (E2) & 20% (E3) levels with black gram & green gram dhals. Papads were sun dried and roasted on LPG gas-stove & deep fried and compared with control papad for palatability. Appearance of E3 papad received comparatively lower scores because of darker colour imparted by mushroom powder. E1 & E2 papads were well accepted for all sensory attributes. Mushroom papads prepared in the present study were good in protein, dietary fiber, iron, calcium and phosphorus. It can be concluded that oyster mushroom powder can be incorporated in papad without affecting the sensory quality.