Mushroom farming is now gaining popularity worldwide. In the past, mushrooms were consumed only by rural people and had little commercial value. It was not until recently, with the introduction of cultivated mushrooms, that small-scale farmers saw an opportunity that could support their livelihood. The production of mushrooms contributes significantly to food security and nutrition. Mushrooms have rich nutritional content therefore, there is a high demand since they are utilized as food and medication. Compared to other traditional crops, mushrooms are crops that can be harvested indoors which require little space and offer a faster turnaround. However, mushroom cultivation requires a controlled environment with favourable conditions, which includes monitoring of temperature, humidity, moisture, light, ventilation and carbon dioxide (CO2) as these parameters directly affect mushroom growth. Utilization of smart farming technology has made it easy to manage these environmental parameters using modern techniques. Smart farming enables mushroom farmers to enhance productivity by integrating technologies, which include Artificial Intelligence (AI), machine learning, Internet of Things (IoT) and cloud computing. These smart systems connect the physical and digital worlds to allow automation and remote monitoring for easy management of mushroom houses. Nonetheless, even with the use of complex systems, this sector is, however, not without challenges. This paper reviews current smart farming systems deployed in mushroom farms for improved management and productivity. The paper also covers the challenges that the mushroom sector is currently facing and how digital twin technology can be a possible solution to the identified issues and problems.