Harnessing edible fungal mycelium as a future food ingredient presents a promising strategy for developing sustainable, nutrient-dense alternatives to conventional snack products. However, fundamental understanding of how processing and formulation influence the structural and textural functionality of mycelium-based materials remains limited in the context of practical food applications. This project investigates the feasibility of developing pelletized Pleurotus ostreatus mycelium as a functional crunchy snack ingredient by characterizing how cultivation, freeze-drying, and ingredient imbibition influence its structural, textural, and visual properties. Mycelium pellets produced via submerged cultivation exhibited inherent variability in size and morphology, forming a dynamic substrate for post-processing modification. Selected food-grade ingredients were imbibed into the pellets to evaluate uptake behavior and their effects on color, surface appearance, and mechanical performance. Freeze-drying was applied to preserve the filamentous architecture while inducing crisp, low-moisture textures. Instrumental texture analysis (double-compression TPA) quantified changes in hardness, fracturability, cohesiveness, and crispiness across formulations, while scanning electron microscopy (SEM) visualized pore structure and microscale hyphal organization. Preliminary early-stage prototypes and an exploratory concept survey provided early insights into consumer perceptions of a mycelium-based crunchy snack format. Together, these findings establish a foundational understanding of how processing conditions and imbibed ingredients can tailor mycelium pellet functionality, supporting their development as a novel, health-forward, and structurally tunable snack ingredient.