Perenniporia fraxinea is a kind of white-rot fungi that is always found in rotten wood of broad-leaved trees, such as Fraxinus chinensis, sassafrases tzumu, Poplus spp.and Salix spp. This fungus is also a medicinal mushroom with anti-tumor effects, and is widely distributed in Shandong province of China. In this paper, the biological characteristics of the fungus and the optimal cultivation conditions of Shandong strain isolated from the fruiting body were studied. For the screening of single optimal factor, temperatures from 15℃ to 35℃ at 5℃ interval, pH at 4 to 9 at 1 interval and each of 6 carbon sources and nitrogen sources were tested for the mycelia growth rate and mycelia growth potential. As a result, the fungus grew better on maltose, soluble starch, fructose as the carbon sources; yeast extract, peptone, beef extract as the nitrogen sources; 20℃, 25℃, 30℃ and pH 5, 6, 7. The orthogonal experiments with the above selected three conditions for each of the four factors were then performed and the optimal cultivation conditions were determined. A descending order of the impact for the four factors was temperature > pH > carbon source > nitrogen source and the F-test showed very significant difference among all the four factors. The optimal culture condition for Perenniporia fraxinea was the combination of Starch plus Yeast anointed with pH 6 and at 30℃. In the domestication experiments of Perenniporia fraxinea, the stages of pre-culture spawn, of manufacturing cultural bags, of spawn running, of inducement to primordium, of fruiting period management, of collected periods were studied. Liquid fermentation culture was chosen for the pre-culture spawn with the following recipe:1000 mL fermentation medium:Glucose 20 g, Peptone 6 g, Yeast anointed 5g, MgSO₄ 1 g, KH₂PO₄ 2 g, and with the conditions of culture: 150 r/min, 6 days at 25℃. Cottonseed hull, bran, lime were used as the main fruiting cultivation materials. For the fruiting test, the following recipe of the cultivation medium was used: cottonseed hull 79%, bran 20%, lime 1%. Five mL liquid spawn per cultural bag was used for inoculation. On the stage of spawn running, clean environment was essential in order to prevent contamination. The optimal condition for this stage was to keep a steady temperature of 30℃ and darkness, ventilation. On the stage of inducement to primordium, a lower temperature of 14-16℃ was required. On the stage of fruiting period management and for fruit growth, the optimal temperature range was 21-27℃, and relative humidity range was 80%-90%, scattered light was needed. On the stage of harvest, Perenniporia fraxinea could be picked up when milk white hymenium appeared and the fruiting body stopped growing. The cultivated fruiting bodies showed the appearance identical to the wild ones under optimal conditions.