In 1993, Japanese mycologists discovered and began to cultivate a new medicinal mushroom found in the fields northwest of Sao Paolo, Brazil. Best known by its Latin name as Agaricus blazei, it has rapidly become one of the top five most sought after medicinal mushrooms in the world.
Research on Agaricus extract has largely focused on its anti-cancer properties. Results on uterocervical cancers appear promising. 
One study reported that Agaricus extract contained a higher level of beta glucans than any other medicinal mushroom. So while not included in this article, it may be worthwhile to also look into beta glucan related research. 
While Agaricus extract appears to have little to no effect on cancer cell cultures grown in labs (in vitro), the tests conducted on live patients (in vivo) have been all the more promising. The conclusion from this would be that it works by stimulating the natural cancer-fighting mechanisms of the human immune system. [135, 136, 137, 138, 139, 140]
In 2002, a Japanese study presented results indicating that Agaricus extract stimulates the immune system to perform a two-stage attack against cancer cells. In stage one, eight hours after administering Agaricus extract, the macrophages (white blood cells) excreted "alpha tumor necrosis factor," a well-known cancer killing compound. In stage two, which happened an additional four hours later, another compound was excreted by the same macrophages to finish off cancer cells weakened by the initial attack. 
Another specific cancer related effect of Agaricus extract is that it inhibits the enzyme aromatase, which is associated with the development of breast cancer. 
Both water and alcohol extracts of Agaricus blazei contain potentially important therapeutic compounds.  The mycelium ("roots") in particular appear to contain high concentrations. 
The immune enhancing properties of Agaricus extract may also make it useful against other diseases. E.g. a study on Agaricus blazei against salmonella reported positive results. 
Finally a few words of caution: One test in 2003 showed that Agaricus blazei grown in China contained a significantly larger amount of cadmium than Agaricus grown in the United States. 
Secondly, although Agaricus extract has demonstrated some powerful anti-cancer properties, it also contains a family of cancer-inducing compounds known as agaritines. (These are also found in button mushrooms, crimini mushrooms and portobellos.)
A 2003 study by Stijve et al. found that the Agaricus blazei extract produced in the U.S. by medicinal mushroom expert Paul Stamets contained significantly less agaritines compared with Agaricus blazei from California or China by a factor of 2000% and 8000% respectively. 
"Years ago, Paul Stamets ... developed methods that precluded agaritines, and Stijve et al. (2003) published a comparison of commercial products from the US, China, and Japan. All but [Paul Stamets] products contained significant amounts of agaritine." 
Additional therapeutic effects of Agaricus extract as listed by Paul Stamets in his book Mycelium Running may include: Blood sugar; viruses; cholesterol; sarcoma; colorectal cancer. 
Note: The statements on this page have not been evaluated by the Food and Drug Administration. This article is not intended to diagnose, treat, cure or prevent any disease. Always consult a licensed medical practitioner before using any herb (or mushroom) for medicinal purposes.