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Background: One of the medicinal fungi that has been used in traditional medicine for a long time is the Basidiomycete fungus Fomes fomentarius, which is widely distributed in Iran. Polysaccharides as one of the metabolites of this fungus have anti-inflammatory, anti-diabetic, antibacterial, antioxidant, and anti-cancer properties. Materials & Methods: Optimization of independent variables of MgSO4.7H2O concentration, initial pH, yeast extract, and inoculum percentage to increase biomass and polysaccharide production of F. fomentarius was investigated using the Taguchi method. Then, the biological properties of the produced polysaccharide including antibacterial activity was investigated by bacterial colony counting method, antioxidant activity using DPPH free radical, and antiproliferative effect on 5 cancer cell lines MKN-45, AGS, A549, KYSE-30 and 5637 using MTS test. Results: The concentration of MgSO4.7H2O and initial pH had a significant effect (P A549 5637> AGS> MKN-45). This effect increases with increasing concentration. In KYSE-30 cell line treatment with 200 g/mL polysaccharide, cell viability reaches 40% after 72 hours. Conclusion: Optimizing the culture medium of the medicinal fungus Fomes fomentarius increases the production of polysaccharides up to 5.410 g/L. Optimization increases the biological activity of polysaccharides. Antibacterial activity against Staphylococcus aureus and Escherichia coli is 50% and 25%, respectively. The antioxidant activity of polysaccharides is 16.11% and the viability of KYSE-30 cancer cells reaches 40% after 72 hours.