The increasing market interest in sustainable beauty products drives researchers to investigate fungal-based cosmetics as alternative solutions. Industrial-scale manufacturing of innovative products encounters multiple major production obstacles. The industrial production of fungal cosmetics encounters three major challenges, which include developing efficient cultivation methods to achieve consistent fungal quality and quantity, improving extraction and formulation techniques to maximize bioactive compound use, and overcoming regulatory challenges for new cosmetic ingredients. The successful entry of fungal-based cosmetics into the mainstream market depends on both consumer acceptance and effective marketing strategies. This chapter identifies and examines the main production barriers for large-scale manufacturing while providing guidance for future industry developments.