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The medicinal mushroom <i>Cordyceps militaris</i> is widely exploited in traditional medicine and nutraceuticals in Asian countries. However, fruiting body production in <i>C. militaris</i> is facing degeneration through cultivation batches, and the molecular mechanism of this phenomenon remains unclear. This study showed that fruiting body formation in three different <i>C. militaris</i> strains, namely G12, B12, and HQ1, severely declined after three successive culturing generations using the spore isolation method. PCR analyses revealed that these strains exist as heterokaryons and possess both the mating-type loci, <i>MAT1-1</i> and <i>MAT1-2</i>. Further, monokaryotic isolates carrying <i>MAT1-1</i> or <i>MAT1-2</i> were successfully separated from the fruiting bodies of all three heterokaryotic strains. A spore combination of the <i>MAT1-1</i> monokaryotic isolate and the <i>MAT1-2</i> monokaryotic isolate promoted fruiting body formation, while the single monokaryotic isolates could not do that themselves. Notably, we found that changes in ratios of the <i>MAT1-2</i> spores strongly influenced fruiting body formation in these strains. When the ratios of the <i>MAT1-2</i> spores increased to more than 15 times compared to the <i>MAT1-1</i> spores, the fruiting body formation decreased sharply. In contrast, when <i>MAT1-1</i> spores were increased proportionally, fruiting body formation was only slightly reduced. Our study also proposes a new solution to mitigate the degeneration in the heterokaryotic <i>C. militaris</i> strains caused by successive culturing generations.