The effects of oxygen supply on the submerged fermentation of Ganoderma lucidum, a famous traditional Chinese medicinal mushroom, for simultaneous production of bioactive compounds—Ganoderma polysaccharide and ganoderic acid (GA) were studied. An initial volumetric oxygen transfer coefficient (KLa) value within the range of 16.4–96.0 h−1 had a significant effect on the cell growth, cellular morphology and metabolites biosynthesis. At an initial KLa of 78.2 h−1, a maximal cell concentration of 15.62 g l−1 by dry weight was obtained, as well as a maximal intracellular polysaccharide (IPS) production of 2.19 g l−1 and its maximal productivity of 217 mg l−1 per day. An increase of initial KLa led to a bigger size of mycelia aggregates and a higher production and productivity of GA. The GA production and productivity at an initial KLa of 96.0 h−1 was 1.8-fold those at an initial KLa of 16.4 h−1. Dissolved oxygen tension (DOT) also affected the fermentation process. The cell growth of G. lucidum was significantly inhibited when DOT was controlled ∼10% of air saturation, which was due to the oxygen limitation in mycelia aggregates. The production of extracellular polysaccharide (EPS) and contents of IPS and GA ∼10% of DOT were higher than those ∼25% of DOT. However, the total production and productivity of IPS and GA at a low DOT were lower than those at a high DOT. The fundamental information obtained in this study will be useful for submerged fermentation of G. lucidum on a large scale. © 2002 Elsevier Science Inc. All rights reserved.