Mushrooms release so much water while cooking mainly because their cell structure holds a naturally high water content; rather than pouring off the liquid that collects in the pan, the most practical fix is letting it fully evaporate over high heat and then continuing to sauté the mushrooms in oil.
Why do mushrooms release so much water?
What looks like a meaty texture in mushrooms is largely water; once the cell walls loosen under heat, that water escapes quickly and pools in the pan. A crowded pan, with mushrooms stacked or packed tightly together, traps steam that cannot escape and condenses back onto the mushrooms, making the water release even worse.
Mushrooms cooked over low heat run into a similar problem, since without enough heat, the surface cannot brown quickly enough to seal in moisture; a slowly heating mushroom releases its water first and only starts browning afterward.
How do you brown mushrooms that have already released their water?
Rather than pouring off the liquid pooling in the pan, turning up the heat and waiting until it fully evaporates is the way to go; once that water is gone, the mushrooms meet a dry surface again and start to brown. Adding a little extra oil to the pan at this stage speeds up the browning and gives the mushrooms that golden color.
Arranging mushrooms in a single layer with space between pieces lets steam disperse freely and reduces water pooling from the start; cooking in two batches, rather than crowding the pan, gives a far more reliable result.
How do you avoid the same problem next time?
Mushrooms should go into a wide, uncrowded pan over high heat from the very start; keeping the heat high from the beginning lets water evaporate quickly rather than seeping out slowly. Wiping mushrooms clean with a damp cloth instead of soaking them in water also cuts down on the extra moisture already absorbed before cooking, lowering the amount of water released in the pan.
Do all mushroom varieties release the same amount of water?
White button mushrooms tend to release more water than oyster or king oyster mushrooms, since their water content runs especially high; oyster mushrooms have a less porous structure, absorb a bit less liquid, and can brown faster as a result. Dried mushrooms rehydrated in water to look fresh again also carry more water than naturally fresh ones, so they can release noticeably more liquid while cooking.
Mushrooms cooked in butter can brown slightly faster than those cooked in olive oil, since butter's milk solids create a mild browning effect even at lower heat — a difference that shows up most clearly right after the water has just evaporated. Frozen mushrooms present a similar challenge — their cell structure takes some damage during freezing and releases far more water than fresh ones do, so starting them straight from frozen over high heat, without thawing first, tends to give a better result.