Pollution is a severe issue which affects human health, environment, and sustainable development. Pollutants are the causing agents which are responsible for the environmental pollution. Conventional processes used to remove pollutants are expensive, less efficient, and tend to form new toxic byproducts. Mycoremediation uses fungi to eliminate or degrade pollutants, is a low-cost and environmentally friendly alternative. Fungi possess unique characteristics, including fast growth, extensive mycelial networks, and various enzyme productions, like laccase, lignin peroxidase, and manganese peroxidase. These enable them to degrade most hazardous pollutants, such as hydrocarbons, pesticides, herbicides, dyes, heavy metals, medicines, and other toxic chemicals. This chapter provides a summary of mechanism of action of fungi and their enzymes in the remediation of different pollutants, their utilization in water treatment, and its limitations.