Background: Human health alongside ecosystems face critical dangers because environmental pollution from petroleum products produces rising amounts of polycyclic aromatic hydrocarbons (PAHs). Bioremediation has gained interest as a sustainable removal method because traditional petroleum hydrocarbon removal practices prove both inefficient and expensive. Aim: The purpose of this study was to assess the growth and adaptability of the oyster mushroom, Pleurotus ostreatus, under different contamination levels in Babylon Province, Iraq, in order to determine its biodegradation potential for petroleum hydrocarbons from used engine oil. Methodology: Researcher cultivated P. ostreatus samples through laboratory settings using PDA media with three oil concentrations of used engine oil starting at 1% up to 3%. The research tracked the growth rates while observing morphological changes through an 8-day timeframe. The analysis of data determined whether the treatment conditions produced different growth patterns. Results: At the highest used engine oil concentration (3%) P. ostreatus growth decreased but the microorganism demonstrated adaptive capabilities as inhibition reduced between day one and day eight. Lower concentrations of oil retained stable inoculum viability throughout the period yet viability decreased slightly at high concentrations after 8 days. Conclusion: The biotechnical potential of P. ostreatus exists as a viable approach for cleaning petroleum pollutants from soil environments. Though aggressive at first growth suppression occurs the fungus demonstrates sufficient adjustability to degrade hydrocarbons which positions it as an effective agent for sustainable bioremediation. Additional investigations into petroleum biodegradation through optimal environmental conditions and real applications will improve its overall effectiveness.