Functional foods such as mushrooms are rich in polyphenolic compounds and secondary metabolites with health‐promoting properties such as antioxidant, antimicrobial, antidiabetic and immunostimulatory effects. The present study is aimed to investigate the ethanolic extracts of three varieties of mushrooms, namely, G. lucidum, G. tropicum, and C. indica grown in Bangladesh for phenolic and flavonoid content and their antioxidant properties. Moreover, the phenolic composition of the extracts was analyzed by using the HPLC‐DAD system. G. lucidum extract exhibited the highest antioxidant potential as evidenced by its lowest IC₅₀ value in all the tested assay models (40.44 ± 2.09 μg/mL, 151.32 ± 0.35 μg/mL, 137.89 ± 1.85 μg/mL in DPPH, H₂O_2, and NO scavenging assay, respectively) along with the highest phenolic content (81.34 ± 0.68 GAE g^-1 extract). G. tropicum and C. indica extracts also showed significant antioxidant properties and a good amount of phenolic content, 52.16 ± 0.25 GAE g^-1 extract, and 47.1 ± 0.26 GAE g^-1 extract, respectively. The scavenging activity increased with the increasing concentration of extracts in all cases. The total phenolic content of the ethanolic extracts of mushroom species was highly correlated with antioxidant effects with Pearson’s correlation coefficient (r) values ranging from 0.8883–0.9851. The α‐amylase inhibitory and antibacterial activity of G. lucidum was evaluated by using 3,5‐dinitrosalicylic acid and disc diffusion method, respectively. The maximum inhibitory activity recorded against α‐amylase was 70.98 ± 0.042% at a concentration of 500 μg/mL. G. lucidum extract exhibited the highest antibacterial activity against Pseudomonas aeruginosa with 23.00 ± 1.00 mm clear zone of inhibition and an MIC value of 3.5 mg/mL. The results indicate that the mushroom species tested in this study could serve as a potential source of natural antioxidants in the development of nutraceuticals and herbal drugs for the management of oxidative stress‐associated diseases as well as infectious diseases.