The demand in the food industry for oyster mushrooms is increasing from time to time. Rubber sawdust, an rice bran are the two most common commercial substrate materials utilized for the grey oyster mushroom grower. The raw materials used in the substrate for the grey oyster mushrooms cultivation are sawdust, rice bran and calcium carbonat. However, dependency on rubber sawdust making increased the price of sawdust which affect the mushroom grower. Therefore, this study investigates rice straw as an alternative substrate for mushroom growth as well as to use the spent mushroom substrate (SMS) as organic compost mixed with goat dung on the growth of red spinach (Amaranthus gangeticus) under nursery conditions at the Universit Malaysia Kelantan, Jeli campus. In this study used treatment as TI (control) sawdust substrate, and T2, rice straw substrate.. The result from this study conveyed there were significant differences in growth performance between the treatments in the cultivation of Pleurotus sajor caju. It showed that T2 has better growth performance of P. sajor caju compared to TI (control) in terms of the short duration of mycelium full colonization (32.67±2.67 days), first harvest period (43±1.77 days), higher yield weight (26g±1.31g), stipe length (3.56±0.81 cm) and pileus diameter (6.72±0.94 cm). Based on the overall result in this study, it showed that (T2) is suitable to be used as an alternative or new substrate to grow P. sajor caju. For compost result, T2 has better growth compared TI in terms of the height of the plant (2.3±2.04cm) and the number of leaves (4±3days).