The rapid increase in wastewater production due to industrialization and urbanization has led to significant environmental concerns, especially regarding the treatment of sewage and industrial effluents. Wastewater sludge, consisting of a variety of organic and inorganic substances, poses a challenge for treatment due to its complex composition. The introduction of fungi in wastewater treatment, particularly in the bioremediation process, offers a promising and cost-effective solution. Fungi, due to their unique enzymatic capabilities, are able to degrade a wide range of pollutants, including phenolic compounds, heavy metals, and organic chemicals, through processes like biosorption and biodegradation. Filamentous fungi such as white-rot fungi (WRF) have demonstrated exceptional potential in breaking down recalcitrant pollutants in wastewater, contributing significantly to the detoxification and decolorization of effluents. Furthermore, fungal cell walls, rich in functional groups, make them excellent candidates for adsorbing heavy metals and organic pollutants, which can then be immobilized or transformed into non-toxic compounds. The use of fungi in wastewater treatment not only reduces the environmental burden but also provides a sustainable alternative to traditional physicochemical methods. This chapter highlights the various bioremediation techniques involving fungi and discusses their applications in treating wastewater, sludge, and contaminants such as phenols, heavy metals, and industrial waste. It concludes that while fungi offer an effective means of pollution mitigation, further research, particularly large-scale industrial applications, is necessary to fully exploit their potential in wastewater management.