Effect of binding agents (carrageenan, soy protein concentrate, casein and xanthan gum) at different concentrations on quality characteristics and nutritional properties of mushroom based sausage analogues made with 5% saturated fat was studied. Significant improvement in textural properties (purge loss and emulsion stability) was observed in samples made with carrageenan as binding agent (P < 0.5). Compression and springiness values also corroborated the same. Sausage samples with xanthan gum were rated as second best after carrageenan samples in terms of textural properties by objective evaluation but subjective evaluation by panelists rated the product as sticky. With carrageenan concentration at 0.8%, purge loss and cook loss of analogue sausages decreased by 59.63 and 55.55% respectively, while yield and emulsion stability improved by 37.62 and 67.49%, respectively, as compared to control. Sausages with SPC and casein were found to be unacceptable by subjective as well as objective evaluation. The concept of utilization of fat replacement additives to improve the quality characteristics of low fat meat sausages has been extended to mushroom based sausage analogues made with added fat. This will lead to development of mushroom based sausages as meat analogues and this study would further open research for utilization of mushrooms and fungal mycelia for meat replacement. Soya has been in use for years as a meat replacer and with studies in this area would open scope for utilization of mushroom for the same purpose and also for new product development from mushrooms. This would also cater to the large vegetarian population and also to the growing vegan population across the globe.