Different constituents of the cultivation substrate have significant effect on the yield and quality of edible mushrooms. The residue after the extraction of instant tea has exhibited to be biologically significant, and could be used as a substrate for cultivation. This study aimed to investigate the feasibility of tea extraction residue (TER) on button mushroom (Agaricus bisporus) cultivation, as an ingredient in the substrate, and assess the growth status, nutritional values, and sensory characteristics of fruiting body. The results showed that the strains could grow well on the cultivated substrate with 20% addition of TER. The total amount of hydrolyzed amino acids in the fruiting bodies of three TER-based groups (TER accounted for 10%, 20%, and 37.5%, respectively) was higher than that of the control group, and the total amount of essential amino acids was increased by 33.33%, 22.47%, and 9.92% compared with the control group, respectively. In addition, the results of gas chromatography-mass spectrometry (GC-MS) revealed that the addition of TER to the cultivation of substrate significantly enhanced the content of typical mushroom-flavor compounds in button mushroom, such as 1-octen-3-ol, 3-octanol, and 1-octen-3-one. It can be concluded that TER may be an ideal choice for the substrate in commercial cultivation of button mushroom.