Growing mushrooms can be an exciting adventure! Mushrooms are actually the 'fruit' of the organism. The 'living' part of the fungi is actually the mycelium, which is a product of the spores. This web page will outline how to grow mushrooms from spores all the way to harvest.
Mycelium from spores
Producing mycelium from spores can be a difficult task. You need sterile conditions and spores that do not have significant contaimination. The spores are usually placed on agar which in turn forms the mycelium. Bacteria also likes agar so it is imperative to have sterile technique throughout the whole process. There are many ways to obtain a 'sterile' environment. Some people make their own glove box using a Hepa filter.
Others use a hot oven!
Here's an easy formula for agar:
Potato Agar (Fool Proof)
Here's how you get the agar mycelium started from spores: First you make a spore print. Then you take a stainless steel wire with a loop on the end (about one quarter inch circle, I made mine out of a piece of piano wire). Then you heat the loop till it's red hot and cooled. Next rub the loop over the spore print then rub it across the jelled agar. You will probably get contamination but then you have to go in and isolate the good mycelium into a new jelled agar.
Mycelium to grain
The mycelium is then transferred from the agar to sterilized grain (which is sterilized in a pressure cooker).
Grain to wood
The grain is then transferred to sterilized wood, dowels, or directly to a bed of wood chips outside. Here's a jar of sterilized dowels that have been innoculated with mycelium. They are ready to be pounded into holes in stumps or logs when they are completely covered with white mycelium.