Cakes made with oyster mushroom (Pleurotus spp.) powder showed clear boosts in nutrition and noticeable shifts in flavor, color, and texture. According to the study, adding mushroom powder at 5–20% increased protein (up to 11.42% at the highest level) and reduced total carbohydrates, while maintaining good texture and overall acceptability. The 15% formulation performed best in sensory testing, earning the highest panel scores for color and texture, and nearly matching control cakes in taste. Physical measurements also showed that mushroom-fortified cakes had slightly larger volume and lower density due to better air incorporation. These findings demonstrate that everyday baked goods can be upgraded nutritionally and organoleptically with oyster mushroom powder—extending mushroom shelf life while creating healthier value-added products.