The global mushroom industry is a high-value agribusiness experiencing rapid expansion and recognition worldwide. This growth is primarily driven by increasing consumer demands for sustainable alternatives, as well as the minimal resource and land requirements for production. Mushroom farming offers several advantages over conventional farming; however, manual dependency and inconsistent regulation restrict the yield and profitability. Addressing these challenges requires the integration of advanced technologies that can ensure precision, consistency, and scalability. This chapter examines the transformative role of Internet-of-things (IoT) technologies in advancing mushroom production on local as well as commercial scales. It discusses how real-time monitoring and automated control algorithms can regulate growth parameters—temperature, humidity, carbon dioxide concentrations, substrate moisture, and ambient light—for proper mycelial development, primordia initiation, and fruit body maturation. It also emphasizes how tools like low-cost sensor networks, wireless communication systems, and artificial intelligence (AI) platforms could collectively support data-driven decision-making in mushroom cultivation. Case studies and recent innovations demonstrate how IoT-enabled smart farms enhance productivity, improve resource efficiency, reduce contamination risks, and provide resilience against climate variability. IoT-enabled systems can help establish a new paradigm of precision farming by linking the biological aspect of mushroom cultivation with digital agriculture technologies, bridging the gap, and improving the efficiency. This chapter provides a comprehensive overview of the structure, components, and mechanisms of smart farming linked with applications, challenges, and future prospects, offering valuable insights for researchers, entrepreneurs, and policymakers seeking sustainable and technologically advanced solutions in mushroom agriculture.