Medicinal fungi are fungi that contain metabolites or can be induced to produce metabolites through biotechnology to develop prescription drugs. Compounds successfully developed into drugs or under research include antibiotics, cholesterol and ergosterol synthesis inhibitors, psychotropic drugs, and fungicides.

In Ancient Egypt moldy bread was applied to wound infection. ^[1]

Inonotus obliquus was used in folk medicine tumor treatment in Russia and Northern Europe during the 16th century .^[2]

The ability to identify beneficial properties and then extract the active ingredient from mold started with the discovery of penicillin ^[1] from Penicillium rubens ^[3] by Alexander Fleming, September 1928.^[1][4] Scientific investigation into pharmacological applications of mushrooms began during the 1960s.^[5]

Fumagillin was isolated in 1949 from Aspergillus fumigatus.^[6][7]

Pleuromutilin was discovered as an antibiotic in 1951.^[8][9] It is derived from the fungi Omphalina mutila (formerly Pleurotus mutilus) and Clitopilus passeckerianus (formerly Pleurotus passeckerianus).^[8] Cephalosporins were first sold in 1964, ^[10] the mold which yielded cephalosporin C was first discovered by Giuseppe Brotzu in July 1945.^[11] Citromycin from Penicillium ^[12] was discovered in 1969. ^[13] Oudemansin A from Oudemansiella mucida was first described in 1979. ^[14] Plectasin from Pseudoplectania nigrella was discovered in 2005. ^[15]

As of 2022, there is not enough scientific evidence to indicate that any mushroom or mushroom extract is effective for reducing the risk of cancer.^{[16][better source needed]}

Statins are an important class of cholesterol-lowering drugs; the first generation of statins were derived from fungi.^[17] Lovastatin, the first commercial statin, was extracted from a fermentation broth of Aspergillus terreus.^[17] Industrial production is now capable of producing 70 mg lovastatin per kilogram of substrate.^[18]

Griseofulvin is derived from a number of Penicillium species;^[19] caspofungin is derived from Glarea lozoyensis.^[20]

Hallucinogenic mushrooms include ^[21] Amanita muscaria, the fly agaric and "magic mushrooms", which contain psilocybin and psilocin.^[21]

The history of bread-making records deadly ergotism caused by ergot, most commonly Claviceps purpurea, a parasite of cereal crops.^[22][23] Psychoactive ergot alkaloid drugs have subsequently been extracted from or synthesised starting from ergot; these include ergotamine, dihydroergotamine, ergometrine, ergocristine, ergocryptine, ergocornine, methysergide, bromocriptine, cabergoline, and pergolide.^[22][24]

Brefeldin A was first isolated from Penicillium decumbens in 1958 at Purdue University. ^[25][26][27]

Fungi are a source of ergosterol which can be converted to vitamin D₂ upon exposure to ultraviolet light.^[28][29][30]

The yeast Saccharomyces is used industrially to produce the amino acid lysine, as well as recombinant proteins insulin and hepatitis B surface antigen. Transgenic yeasts are used to produce artemisinin, as well as insulin analogs.^[31] Candida is used industrially to produce vitamins ascorbic acid and riboflavin. Pichia is used to produce the amino acid tryptophan and the vitamin pyridoxine. Rhodotorula is used to produce the amino acid phenylalanine. Moniliella is used industrially to produce the sugar alcohol erythritol.^{[citation needed]}

• Memorial Sloan-Kettering Agaricus subrufescens, Phellinus linteus, Ganoderma lucidum, Trametes versicolor and PSK, Grifola frondosa, Inonotus obliquus, Pleurotus ostreatus, Cordyceps, Shiitake, Lentinan, AHCC.
• American Cancer Society Trametes versicolor and PSK, Grifola frondosa Archived 2010-03-31 at the Wayback Machine, Shiitake Archived 2009-06-14 at the Wayback Machine.
• National Cancer Institute Shiitake, Lentinan, Cordycepin
• Broadbent, Douglas (July 1966). "Antibiotics Produced by Fungi". The Botanical Review. 32 (3): 219–242. Bibcode:1966BotRv..32..219B. doi:10.1007/BF02858660. JSTOR 4353729. S2CID 23442996.