The protein content of a plant-based ingredient is generally lower than its animal food counterpart, and research into novel alternative protein is required that can provide similar protein content, texture and appearance as meat. This work investigates a mycelium-based low moisture meat analogue (LMMA) approach, by incorporating 0 to 40% w/w mycelium (MY) into pea protein isolate (PPI) via extrusion using a twin-screw extruder at 140 °C die temperature, 40 rpm screw speed, and 10 rpm feeder speed (0.53–0.54 kg/h). Physicochemical, rehydration, and structural properties of LMMA were assessed. The MY incorporation led to a significant change in color attributes due to Maillard reaction during extrusion. Water solubility index and water absorption capacity increased significantly with MY addition, owing to its porous structure. Oil absorption capacity increased due to increased hydrophobic interactions post-extrusion. Protein solubility decreased initially (upto 20% w/w MY), and increased afterwards, while the water holding capacity (WHC) and volumetric expansion ratio (VER) of LMMA enhanced with MY addition upto 30% w/w. Conversely, WHC and VER decreased for 40% w/w which was verified with the microstructure and FTIR analysis. Overall, MY (30% w/w) in PPI produced a fibrous and porous LMMA, showing future potential with an increasingly plant-based product market and decreasing carbon footprint of food production activities.