Cocoa pod husks (CPHs), the major side‐stream from cocoa production, were valorized through fermentation with Pleurotus salmoneo‐stramineus (PSS). Considering ergosterol as a biomarker for the fungal content, the mycelium accounted for 54% of the total biomass after 8 days in submerged cultures. The crude protein content of fermented CPH (CPHF) increased from 7.3 g/100 g DM in CPH to 18.9 g/100 g DM. CPH fermentation resulted in a high biological value of 86 for the protein. The water and oil binding capacities of CPHF were 3.5 mL/g and 2.1 mL/g, respectively. The particle diameter dv,0,90 of CPHF was 373 μm as compared to 526 μm for CPH. The total dietary fiber was 73.4 g/100 g DM in CPHF and 63.6 g/100 g DM in CPH. The amount of soluble fiber was 2.3 g/100 g DM in CPHF and 10.1 g/100 g DM in CPH; the insoluble fraction accounted for 71.1 g/100 g DM and 53.6 g/100 g DM, respectively. Bread doughs with CPH or CPHF were characterized for texture, color, and farinographic properties. The dough hardness, consistency, and browning index increased with the concentration of CPH, whereas for CPHF, springiness and peak viscosities declined. We demonstrate the upcycling of CPH into nutritious and functional ingredients through PSS fermentation.