Pile compost into the wooden tray or trays and mix mushroom flake spawn into the compost. Use approximately 1 or 2 cups of mushroom flakes for each 2-by-3-foot tray. Allow the compost and mushroom flake mixture to sit overnight. The next day, press the mixture into the trays using a piece of wood or some heavy bricks. Leave around 2 inches of space at the top of the tray.
Place the trays in a cool, dark area such as in a shed, under a table or in a closet. Keep your growing temperature between 65 and 70 degrees Fahrenheit. In about two or three weeks, the top of the compost should be covered in a thin white webbing of fungal mycelium. Mist the mixture with water several times a day. Do not pour water directly on the compost, because this can damage the developing fungal growth.
Apply peat moss to the top of the compost mixture when the mycelial webbing begins to form. Moisten the peat moss until it holds together easily when you squeeze it in your hand. Add around 1.5 inches to the top of the compost and moisten it again so that it is thoroughly dampened but not soggy. Lower the temperature to around 55 degrees F. Cover the moistened peat moss with a layer of damp newspapers. Spray the newspapers twice a day to maintain the moisture level.
Remove the newspapers after around 10 days. Small white pinheads should be apparent within several days after removing the newspaper. They will ripen into fresh mushrooms in around a week. Your mushrooms will grow faster if you increase the temperature in the room to around 65 or 70 degrees F, but you may end up with too many at once, so it's usually better to keep the temperature between 50 and 55 degrees so that the mushrooms grow more slowly.
Your compost and peat moss mixture will continue to produce mushrooms approximately every two weeks for between three and six months. Dispose of the compost when it stops yielding mushrooms and start the process over.