Water retaining agent for edible fungi is prepared from raw materials including, by weight, from 40 to 80 parts of super-absorbent resin, from 50 to 60 parts of humate, from 10 to 20 parts of deionized water, from 10 to 20 parts of acrylic acid, from 2 to 4 parts of calcium hydroxide, from 30 to 40 parts of trace elements and from 20 to 30 parts of plant growth regulator. Moisture can be repeatedly released and absorbed, and certain heat-insulation and breathability functions are realized. Nutritious matters required by growth of the edible fungi can be provided, simultaneously, the edible fungi are urged to absorb moisture, and the price of products is low. The water retraining agent is wide in application range, and is applicable to material mixed and bagged cultivation of edible fungi, including oyster mushroom, shitake mushroom, ganoderma lucidum, coprinus comatus, pleurotus eryngii, pleurotus nebrodensis, agrocybe chaxingu, hypsizygus marmoreus, needle mushroom, agaric, hericium erinaceus, agaricus bisporus, button mushroom and the like.