Therapeutic properties of Pleurotus sp. mushroom are associated with the polysaccharides present in the mycelium cell wall and culture broth of submerged culture. Submerged fermentation of Pleurotus sp. mushroom mycelium was carried out through one-factor-at-a-time method for mycelial growth, extracellular (EPS) and intracellular (IPS) polysaccharide production. The mycelial growth, EPS and IPS concentration was high when sucrose was used as carbon source which produced 4.66 g/L of mycelium dry weight, 7.16 and 4.76 mg/ml of exopolysaccharide (EPS) and endopolysaccharide (IPS) concentration respectively. Manipulation of sucrose concentration up to 100 g/L resulted in an increasing of mycelium dry weight with 6.3 g/L and 7.9 mg/mL of EPS concentration. The effect of carbon/ nitrogen source ratio in the liquid medium to the biomass and polysaccharides production was also investigated. C/N ratio of 80:1 resulted in high IPS concentration (11.89 g/L). Crude palm oil (CPO) and palm kernel oil (PKO) were incorporated with sucrose to serve as carbon source in the medium at different ratio. Both CPO and PKO have enhanced the yield of biomass and polysaccharides. The highest biomass obtained was 47.9 g/L when the PKO:Sucrose ratio at 100:0. At PKO:Sucrose ratio 25:75, highest EPS concentration (5.39 g/L) was obtained whereas the highest IPS concentration (34.02 g/L) was obtained at PKO:Sucrose ratio at 30:70. Instead of enhancing the growth of Pleurotus sp. mycelium in liquid culture, the used of palm oil mill effluent (POME) residues as carbon source had reduced the biomass and polysaccharides production.