Purpose Novel protein sources are urgently needed to meet the increasing protein demand of a continuously growing world population. This study is focused on the production of protein rich mushroom mycelia on industrial side streams. Methods Submerged propagation of mushrooms was carried out in shake flasks which contained agro-industrial side streams as the sole carbon source. The biomass obtained was analyzed for its crude protein, ash and fat content as well as for its fatty acid and amino acid profiles. Vitamin D 2 production from ergosterol in the biomass was induced by UV-B irradiation and determined by HPLC-DAD. The share of fungal mycelium in the total biomass was determined by extraction and quantitation of ergosterol. Additionally, water and oil binding capacity (WBC and OBC) were evaluated. Results A screening of basidiomycetes grown on agro-industrial side streams indicated a fast growth of Pleurotus sapidus on apple pomace. After 4 days of cultivation, the biomass obtained from this mushroom-substrate combination contained 21% true protein in dry matter. In addition to proteins, the amounts of lipids (4%), ash (2%) and carbohydrates (74%) were quantitated. The dominating fatty and amino acids of Pleurotus sapidus grown on apple pomace were linoleic acid and glutamic acid/glutamine, respectively. Concentrations of up to 115 µg (g dry matter) −1 vitamin D 2 were formed from ergosterol by UV-B irradiation. Ergosterol was used as a biomarker to monitor the amount of fungal content. Conclusion The nutritional value of agro-industrial side streams such as apple pomace can be upcycled by biotransformation with basidiomycetes.