To boost the nutritional and functional quality of cookies, wheat flour was replaced with Calocybe indica powder (CIP) at different proportions (0, 5, 10, 15 and 20%). Formulated CIP cookies were characterized for nutritional, functional and sensorial properties, and compared with conventional cookies to evaluate the stated purpose. The study revealed that CIP incorporation significantly (p<0.05) increased protein, fibre, minerals (Fe, Zn and K), and -glucan contents in dose dependent manner as compared to the control. Further, total contents of phenolic, flavonoids and antioxidants (DPPH and FRAP) properties were found toincrease from 6.26 to 17.53mg GAE/g, 0.14 to 0.42mg Quercetin/g, 5.36 to 15.19% RSA and 7.58 to 35.01mg BHA/g respectively, with increasing levels of CIP. Moreover, In vitro starch digestion study revealed a significant decrease in starch hydrolysis index with incorporation of CIP, concomitantly reducing glycemic index of cookies from 94.57 to 54.54. Sensory profile of the samples was analysed using fuzzy logic, executed that 10% CIP cookies scored 57.72 defuzzified sensory score falling under medium category and hence, found to be acceptable and palatable. The study concluded that inclusion of CIP at 10% could output a sensorial acceptable, nutritionally rich functional cookie.