Background: Anxiety involved panic attacks either having or not having social fear, social anxiety disorder, generalized anxiety disorder as well as separation anxiety disorder is known to be marked mental diseases. It is related to high medical cost and a significant load of disease. Agaricus blazei Murill (AbM) is a mushroom and possesses immunemodulating and antimicrobial effects both in-vivo and in-vitro and as well as it has been used to treat cancer, hepatitis, dermatitis, and hyperlipidemia traditionally. Method: In this experiment evaluation of anxiolytic effect of AbM on mice has been done by using Elevated Plus Maze test, open field test and motor co-ordination test by rotarod. Mice (Mus musculus) weighing 22-25 grams, were divided into 4 groups (n=6). Oral administration of hydro-alcoholic extract of AbM was utilized in 2 doses i.e. 136.5 mg/kg and 273 mg/kg. Group, I received vehicle (distilled water 10 ml/kg), p.o. Group II received standard (diazepam 1 mg/kg), i.p. Group III and IV orally received hydro-alcoholic extract of AbM (136.5 mg/kg and 273 mg/kg, respectively). Result: In Elevated Plus Maze test, oral administration of hydro-alcoholic extract of AbM (136.5 mg/kg and 273 mg/kg, respectively) exhibited significant (p<0.01) elevation in the percentage of number of open arm entries (48.0 ± 1.1% and 48.93 ± 2.1% respectively) and time spent in open arm (14.92 ± 1.9% and 84.17 ± 2.4%). Conclusion: Hence it is concluded that hydro-alcoholic extract of AbM can be a new therapeutic agent to treat anxiety.