Millions of people lose their memories together with independence and quality of life because of Alzheimer’s disease (AD), which is a destructive neurodegenerative disorder. The absence of any effective treatment for this disease has driven scientists to discover new therapies through medicinal mushrooms. The mushrooms Hericium erinaceus (Lion’s Mane), Ganoderma lucidum (Reishi), and Cordyceps spp. demonstrate potential as AD game changers because they contain neuroprotective compounds. These fungi have dual benefits for brain health because they directly target neurodegenerative mechanisms, which reduce beta-amyloid plaques and tau tangles and reduce neuroinflammatory turbulence. The psychedelic compound psilocybin found in particular mushrooms demonstrates potential benefits for mood improvement and cognitive function and neuroplasticity enhancement, which slow down the progression of AD. The ancient natural remedies present an opportunity to establish a new generation of Alzheimer’s treatments. The review explores the remarkable field of medicinal mushrooms and their potential to serve as transformative therapy for this major medical issue of our time.