Casing is an integrated part of mushroom compost ecosystem and it supposed to trigger fruit body formation conducted by the bacterial community residing in casing soil. During this process succession of bacterial community from 0 day stage to harvesting stage has been taken place. Mycelium- impregnated stage of both the casing layers (FYM+SC; FYM+VC) exhibited significant variation in nutritional status than other stages. Morphotypes recovered from mycelium-impregnated stage of FYM+SC and FYM+VC showed higher functional diversity than other stages. Acinetobacter sp. was highly prominent in casing layer compared Pseudomonas sp. identified by 16S rDNA partial gene sequencing. However, endotrophic population comprised largely of Bacillus sp. Maximum variation in functional diversity during substrate utilization was observed for FYM+SC (2:1), followed by FYM at 0 day stage; it was higher for FYM followed by FYM+SC (2:1) at harvesting stage. A significant variation was observed in nutritional status of casing combination for mycelium-impregnated stage.