In traditional Chinese medicine the Cordyceps militaris has a long history of use and is gaining importance as a food supplement in the west. Many modern studies confirm its therapeutic effects. Evidence shows that bioactive ingredients of the C. militaris have many positive pharmacological effects on human health. In our study, we investigated the influence of substrate type on growth of fungus, production of cordycepin and biological effect of water extracts from overgrown substrate. The mycelium was grown on wheat grains only and with addition of peptone, mealworm larvae or coffee waste. Type of substrate had a strong infrulence on growth of C. militaris. Mycelium growth was most condensed on wheat grains with added mealworm larvae. Primordia formation was strongest on wheaten grains with added coffee waste. Samples of the overgrown substrate were taken at three different growth periods. Water extracts were made from samples and concentration of cordycepin was measured. We showed that type of substrate had the most important effect on concentration of cordycepin. Substrates from wheaten grains with added mealworm larvae and added coffee waste had resulted in biggest production of cordycepin. Water extract of overgrown wheat grains with added coffee waste had maximum effect on reduction of intracellular oxidation and minimum effect on reduction of intracellular ATP level in yeast cells of Saccharomyces cerevisiae, compared to wheat grains substrate.