Mushroom waste (MW) valorization is a promising approach to transforming by-products from mushroom production into valuable bioactive compounds. Mushroom cultivation results in a variety of by-products such as caps, stipes, noncommercial grade mushrooms, and spent mushroom substrate (SMS). These by-products are generally treated as a waste problem; however, these are nowadays considered valuable sources of bioactive compounds like polysaccharides, phenolics, proteins, enzymes, and secondary metabolites. The MW can convert into the functional food ingredients, animal and poultry feed, biofertilizers for improving soil fertility, absorbents in wastewater treatment, production of bioenergy (ethanol), and create sustainable materials for industries like electrochemical and papermaking. Utilizing MW as a raw material for new products supports both economic growth and environmental conservation. This chapter explores various approaches to convert MW into a valuable product, with consideration of applicable technologies and actual implementations.