The present study deals with the challenges acquainted with in vitro culture of Ophiocordyceps sinensis. We have optimized the culture conditions for the growth of O. sinensis mycelium in semi-synthetic liquid media and determined antibacterial potential of the cultured mycelia extracts. In this study, mycelia were isolated from fruiting bodies and the isolate was identified as O. sinensis anamorph based on sequencing of internal transcribed spacer region. We investigated different culture conditions to optimize the growth of mycelia. Through this investigation, the isolated strain was observed to have its optimum growth at temperature (20°C), which yielded biomass of 12.38 g/L and pH (6.0) yielded biomass of 11.24g/L. Further to augment the production of mycelia, different carbon and nitrogen sources were optimized for mycelium growth in liquid media, out of which sucrose and corn steep powder proved to be the best carbon and nitrogen sources yielding biomass 14.01 g/L and 14.14 g/L, respectively. The evaluation of aqueous and methanolic extracts for antibacterial activity depicted that these extracts are active against all bacterial strains tested here. Aqueous extract depicted minimum inhibitory concentration (MIC) of 0.312, 0.019, 0.078, 0.312, and 0.625 mg/mL and methanolic extract depicted 1.25, 0.078, 0.009, 1.25, and 0.156 mg/mL against Pseudomonas aeruginosa, Escherichia coli, Bacillus cereus, Staphylococcus aureus, and Listeria monocytogenes, respectively. These results led to optimization of enhanced biomass production of O. sinensis, which can be a better alternative approach for further physiological studies and large-scale cultivation of this mushroom for its utilization for therapeutics and nutraceutical values.