A method of converting the composition of peat which comprises the steps of:mixing the peat with 10 to 40% by weight of particles of cereals such as corn or bran thereof on the basis of the weight of the peat;culturing the hyphas of a mycorhiza-forming, white-rotting edible mushroom with the mixture used as a culture bed;germinating the resultant fruit bodies;removing the fruit bodies from the culture bed;utilizing the residue as a livestock feed; andwhere required, adding a fermentation agent to the residue to ferment it into a fertilizer.