Agaricus bisporus is in general cultivated on wheat and rice straw in China. However, millet straw is a potential alternative resource for Agaricus bisporus cultivation, but this has hardly been studied. In the present study, the feasibility of millet straw based mushroom production was analyzed by three successive trials. Mature compost demonstrated high quality with total nitrogen, pH, and C/N ratio of 2.0%, 7.5, and 18:1 respectively, which was suitable for mushroom mycelia growth. During composting, 47–50% of cellulose, 63–65% of hemicellulose, and 8–17% lignin were degraded, while 22–27% of cellulose, 14–16% of hemicellulose, and 15–21% of lignin were consumed by A. bisporus mycelia during cultivation. The highest FPUase and CMCase were observed during mushroom flushes. Endo-xylanase had the key role in hemicellulose degradation with high enzyme activity during cultivation stages. Laccase participated in lignin degradation with the highest enzyme activity in Pinning stage followed by a sharp decline at the first flush. Yield was up to 20 kg/m², as this is similar to growth on wheat straw, this shows that millet straw is an effective resource for mushroom cultivation. Actinobacteria, Bacteroidetes, Chloroflexi, Deinococcus-Thermus, Firmicutes, and Proteobacteria were the dominant phyla, based on 16S rRNA gene sequencing during composting. The key environmental factors dominating bacterial communities of the samples were determined to be pH value, cellulose content, and hemicellulose content for prewetting and premixed phase of basic mixture (P0); moisture content for phase I (PI); and nitrogen content, lignin content, and ash content for phase II (PII), respectively.