To elucidate optimum environmental condition for artificial cultivation of Grifola frondosa, light condition and CO2 concentration have been examined. First, the effects of light quality(blue, green, white) and light intensity(200, 500, 800, 1200 lux) on primordia formation, fruit body yield and morphological properties of Grifola frondosa in bag culture method were tested. Among different color fluorescents, white light(400∼620 nm) had a high mushroom yield(242 g) and a shorter cultivation period(52 days) In particular, morphological properties of G. frondosa using blue light(400∼560 nm) was obtained a wide and deep colored pileus. We also investigated that the appropriate light intensity for production of G. frondosa. The experimental results indicated that 500 lux light was the most effective on mushroom production, whereas, primordia formation was effective at 200 lux. In summary, we propose that the optimal light condition for the bag culture of G. frondosa is white source of fluorescent light and 500lux of light intensity. Second, G. frondosa were cultivated at four CO2 level, 500, 800, 1000, and 1500 ppm after spawning. Comparison in production of fruit body in G. frondosa better result were obtained at lower CO2 levels below 800 ppm. The higher ratio of primordia formation, faster time of primordia initiation and days to harvest(57 days), higher yields and quality of fruit body at lower CO2 levels below 800 ppm than higher that over 1000 ppm, whereas shape of fruit body at higher CO2 levels over 1000 ppm were showed abnormal and lower quality.