The present study deals with the cost effective production of biomass from Fusarium venenatum using different carbon sources (cane sugar, brown sugar, malt and fructose). Optimization of selected carbon sources and seed size using Central Composite Response Surface Design (CCRSD) indicated that sucrose (1.64 g/100 mL) and seed size (10% v/v) were optimal in maximizing biomass yield (0.5602 g/100 mL, p < 0.0001) and protein yield (49.99%, p < 0.01) of Fusarium venenatum. The acetonitrile and methanolic extracts of biomass showed promising antioxidant activity (DPPH assay, 59.7 and 51.9% respectively, 250 mu g/mL). The mycoprotein, in the Triton-X 100-induced hyperlipidemic model in rats, exhibited significant reduction of serum lipids levels (p < 0.01 at 100, 200 and 400 mg/kg body weight) with significant increase in HDL level. It also exhibited antibacterial activity against S. aureus. LC-MS analysis of ACN extract of biomass showed two major peaks (Compound 3: m/e 701.4941 and Compound 2: m/e 651.4984). Spectral matching with standard MS libraries indicated that compound 3 may be structurally similar to sterol glycoside (m/e 716.99) with absence of methyl group. Also, compound 2 may be cholest-5-en-3-ol (3 beta)-, 9-octadecenoate. These results showed that Fusarium venenatum can act as a source of natural antioxidant along with acting as a valuable protein source. It may also prove to be beneficial in treatment of hyperlipidemia and other cardiovascular conditions. Further bioactivity-guided fractionation and isolation will help to obtain bioactives that may serve as leads for design of new class of therapeutic agents.