To reduce peat while increasing the Water Holding Capacity (WHC) of casing soil in button mushroom production an experiment was conducted in 2006 with three hydrogel treatments of: T0= casing soil with no hydrogel, as control, T1= casing soil + 10% hydrogel (V/V), and T2= casing soil + 20% hydrogel (V/V) with three replicates in a completely randomized design. Results indicated that treatment 1 significantly increased the total yield as compared to other treatments. The lowest yield was obtained through T2 due to an eventual decrease of casing soil porosity. The results also indicated that hydrogel use treatments could increase grade one button mushrooms, while decreasing mushrooms of grade three. Because of the increase in total yield and dry matter content of mushrooms a 10%. Hydrogel, as additional supplement for the casing, is recommended.