Lentinus squarrosulus Mont. is an emerging tropical white rot basidiomycete, with nutritional and medicinal benefits. Low levels of commercial cultivation of the mushrooms limit their availability for use as food and medicine. Mycelia from submerged fermentation are a suitable alternative to the mushroom from L. squarrosulus. Three strains, 340, 339 and 218, were studied to determine optimum growth conditions for mycelia mass and crude exo-polysaccharides (CEPS) production. The experiments were conducted in a completely randomized design (CRD) with a factorial structure. Nutrients involving 8 carbon and 8 nitrogen sources were screened, and concentrations of the best sources were optimized. Optimized nutrients, interaction between strains and other parameters such as agitation and medium volume were investigated to obtain optimum fermentation conditions for biomass and CEPS production. Biomass yield varied among strains depending on carbon or nitrogen nutrient sources. Starch and yeast extract at 30 and 25 g/L were identified as the most important nutrients in mycelia and CEPS production. Nutrient optimization resulted in a 3-fold increase in mycelia mass: 12.8, 10.0 and 15.3 g/L in strains 340, 339 and 218 respectively. There was a significant interaction between strain, agitation, and volume (p < 0.001). Mycelia mass increased with volume under shake conditions, while polysaccharides decreased. There was a weak and negative correlation between mycelia mass and polysaccharides (p = 0.02). Static conditions favored more polysaccharide production. Optimized fermentation conditions resulted in very high increase in biomass: 238.1, 266.9 and 185.0 g/L in strains 340, 339 and 218 respectively. Results obtained could be useful in modeling fermentation systems for large-scale production of mycelia mass, CEPS and other bio-products from L. squarrosulus.