The proximate composition and functionality of Lentinus tigrinus were evaluated to establish and popularize this mushroom as functional food source. The evaluation of functionality focused on the antibacterial and hypoglycemic activities of the mushroom extracts. An acute single oral dose toxicity test in mice was used for its biosafety analysis. The pileus contained higher amounts of protein (25.9%), fat (2.1%), and ash (7.4%) and a higher energetic value (142.1 kcal/100 g) than the corresponding stipe, whereas the stipe contained higher amounts of total carbohydrates (67.7%), which consist of dietary fiber (63.0%) and reducing sugar (4.7%), than the pileus. Biosafety analysis confirmed that L. tigrinus is an edible mushroom species; it was found to be toxicologically safe in imprinting control region mice. The administration of lyophilized hot water extract of the fruiting body (both 100 and 250 mg/ kg doses) to diabetic mice significantly lowered the glucose level by 26.9% in the third week, which was significantly comparable to the results of the antidiabetic agent glibenclamide, which was used as a positive control. In vitro antibacterial assay showed that the ethanolic extract of the fruiting body and the immobilized secondary mycelia had high antibacterial activities against Staphylococcus aureus but not on Escherichia coli. Combining its useful nutrients and significant biological properties, L. tigrinus can be considered a natural source of safe nutraceuticals.