With the rapid development of the edible fungus industry, the environmental pressure and resource waste caused by the massive generation of fungal residue have become increasingly prominent. Meanwhile, heavy metal wastewater pollution and the growing demand for clean energy pose dual challenges to sustainable development. This study focuses on Auricularia cornea var. Li. fungal residue, exploring the establishment of a multi-level resource utilization pathway integrating “porous carbon material preparation—heavy metal adsorption—photocatalytic hydrogen evolution.” Firstly, the Auricularia cornea var. Li. residue-based porous carbon material was examined by combining hydrothermal carbonization, activation and slow pyrolysis. In optimal conditions, the porous carbon obtained yielded a surface area of 675.56 m²/g and formed a composite pore structure consisting of micropores with coexisting micropore and mesopore. Secondly, we performed batch adsorption experiments to study the effects of solution pH, adsorbent dosage and contact time and the adsorption behavior via fitting adsorbing kinetic models. Under optimal conditions, Cd(II) removal efficiency reached 92.36% and an equilibrium adsorption capacity of 92.47 mg/g. We used Cd(II) adsorbed porous carbon as a cadmium source and converted into a CdS photocatalyst using a hydrothermal sulfidation process. The CdS prepared using sodium sulfide as a sulfur source gave an average hydrogen evolution rate of 668.01 μmol·g⁻¹·h⁻¹ and showed higher photocatalytic performance for water splitting to produce hydrogen.