Climate variability poses significant challenges to agricultural systems, particularly in semi-arid regions where smallholder farmers depend on reliable yields and efficient resource use. Considering the potential of ecological intensification, this study investigated the intercropping of maize with paddy straw mushroom (Volvariella volvacea) as a strategy to optimize the microclimate and improve land use efficiency. Field experiments were conducted at the Agro Climate Research Centre, Tamil Nadu Agricultural University, Coimbatore, during the summer and kharif seasons of 2022, using a randomized block design comprising nine treatments. These included four maize planting geometries—wide row spacing (60 × 25 cm), close row spacing (45 × 25 cm), wide paired rows (45/75 × 25 cm), and close paired rows (30/60 × 25 cm)—each tested with and without organic mulch (T1 to T8), along with a polyhouse control (T9). Microclimatic variables such as air and soil temperature, relative humidity, and bed moisture were continuously monitored to assess their influence on mushroom growth and yield. The results showed that close maize spacing (45 × 25 cm), particularly when combined with organic mulch (T6), created a favorable microenvironment with moderated temperatures and increased humidity. This treatment accelerated mushroom development, reducing the cropping duration to 22 days, and resulted in higher biological efficiency and yield compared to wider spacings without mulch. Although the polyhouse control (T9) produced the highest yield, its high infrastructure cost limits feasibility for smallholder farmers. Optimal microclimatic thresholds for mushroom cultivation were identified as 26 to 29 °C in the mornings and 29 to 33 °C in the afternoons, with relative humidity between 80 and 98 percent. All intercropping treatments achieved land equivalent ratio greater than one, indicating improved productivity per unit area. The study demonstrates that simple, field-level interventions aligned with local climatic conditions can mitigate environmental stress, enhance intercrop viability, and promote climate-resilient and resource-efficient agriculture in vulnerable agroecosystems.