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This research attempts to find a new use for lignin and N-rich biogas digester liquid (BDL) as a nutrient supplement during cultivation of pre-packed mushroom bags. Spraying 100 ml BDL/bag/day was found to increase yields of Pleurotus florida by 66–100%. This is a new application for the emerging biomass-fed biogas plants and this makes such plants economic and sustainable. A mass balance analysis of nutrients (C,N&P) indicate that the addition of BDL hastened various mushroom growth stages such as formation of pin-heads, fruiting body and first flush by 2–4 days each. A 20% increase in N supply from BDL has found to increase the mushroom yields by 40%. BDL was found to have 100times lower heavy metal content when compared to digested cow slurry and therefore very low accumulation rates. We report for the first time a new use for BDL which allows valorization hitherto considered not possible.