Growing interest in sustainable construction materials has increased attention toward bio-based insulation systems with low density and renewable origin. This study presents an integrated experimental assessment of a mycelium-bound biocomposite produced from ash sawdust and Ganoderma lucidum as a potential alternative for selected non-load-bearing insulation applications. The fabrication process included substrate sterilization, controlled inoculation, incubation, and final drying to obtain stable test specimens. A comprehensive laboratory program was conducted to determine density, moisture content, thermal conductivity, volumetric heat capacity, thermal diffusivity, compressive response, and indicative fire-performance parameters. The average thermal conductivity was approximately 0.054 W·m⁻¹·K⁻¹, placing the material within the broader range reported for lightweight bio-based insulation materials, although above the level of high-performance synthetic foams. Compression testing indicated moderate mechanical resistance potentially suitable for selected non-load-bearing applications. Fire testing confirmed combustible behaviour of the present formulation, indicating that further improvement in reaction-to-fire performance would be required for broader construction use. Overall, the results identify mycelium-bound ash sawdust composites as a promising renewable insulation concept. However, additional studies are necessary regarding long-term durability, moisture resistance, dimensional stability, and fire-performance optimization before wider implementation can be considered.