A new form to prepare a fermented tea that enhances the utilization of low-quality Gougunao green tea is proposed in this study. Briefly, summer Gougunao green tea was transformed using solid-state fermentation by edible fungi. The sensory quality, physicochemical composition, and in vitro biological activity of the fermented tea were analyzed. Based on the enzyme production and polysaccharide production during the fermentation process, Grifola frondosa was identified as the most suitable strain for fermenting Gougunao green tea. Compared with Gougunao green tea, the fermented tea showed significant increases in aqueous extract, free amino acids, total soluble sugars, and theaflavin content, whereas its protein and total phenol content decreased significantly. Among these, total soluble sugars showed the largest increase (92.23%), followed by aqueous extract (39.54%), while the theaflavin content increased from 0.201% to 0.242%, whereas total tea polyphenols decreased from 108.64 to 94.53 mg•g-1. Sensory evaluation and electronic tongue analysis revealed that the fermented tea had reduced astringency and enhanced freshness, resulting in a more mellow and refreshing overall taste. Moreover, the fermented tea exhibited slightly lower antioxidant capacity compared with the green tea, but showed significantly enhanced inhibition of α-glucosidase (IC50 = 0.236 mg•mL-1) and pancreatic lipase (IC50= 0.524 mg•mL-1), as well as a moderate promotion of Lactobacillus growth. These findings provide valuable insights and references for the deep processing and technological innovation of low-value Gougunao green tea and other low-value tea products.