The driving force behind the interest in using natural herbs in poultry production is to eliminate the use of low-dose antibiotics. Therefore, this study was carried out to investigate the effect of Flammulina velutipes mushroom waste (FVW) on performance parameters, relative organ weight, apparent nutrient retention, excreta composition, immune response and serum immunity in pullets. A total of 360 x 10-week-old ISA Brown pullets were randomly assigned to five equal treatment groups, with nine replications of eight birds for each treatment. The dietary treatments included a standard basal diet as control; antibiotic (0.05% flavomycin); 2% FVW; 4% FVW; and 6% FVW. The total experimental duration was 42 days, from 10 weeks to 16 weeks old. Final live weight was higher in FVW groups than in the control and antibiotic groups. No differences were found for average daily feed intake, average daily weight gain and feed conversion ratio during the entire study period. Proventriculus weight and bursa weight were higher in FVW groups. No differences were observed for other inner relative organ weights (liver weight, gizzard weight spleen and abdominal fat weight) compared with the control and antibiotic groups. Dietary inclusion of FVW increased dry matter, crude protein and ether extract retention compared with control and antibiotic groups. Excreta dry matter content was higher and pH lower, in the FVW groups than in the control and antibiotic groups. Antibody titres against Newcastle disease, Infectious bronchitis and Avian influenza virus vaccines were higher in FVW groups. Serum immunoglobulin parameters (IgA, IgG, IgM) were higher in FVW than in the control and antibiotic groups. Flammulina velutipes mushroom waste can be used at inclusion levels up to 6% in pullet rations for better immune response and nutrient retention without hampering normal growth performance.