Bioprospecting for fungal-derived polysaccharides has become more popular in the fields of natural product research and drug development. This chapter examines the present state of bioprospecting initiatives centred on the discovery and characterization of medicinal fungal polysaccharides recorded in literature. It covers a wide range of fungal species that have been studied as sources of polysaccharides and summarizes in vitro and in vivo research that has shown the therapeutic potential of fungal polysaccharides, notably in cancer, chronic inflammatory conditions, antioxidant activities, and their antimicrobial activity against pathogens such as Escherichia coli and Staphylococcus aureus. This chapter also delves into extraction and purification strategies used to isolate the medicinal polysaccharides and also the structural analysis methods required to determine their chemical constituents and molecular structures. The problems and limits associated with large-scale manufacturing and clinical translation of these fungal-derived polysaccharides are also discussed, as well as potential solutions to overcome these hurdles. Overall, this chapter presents a detailed review of bioprospecting activities aimed at discovering and developing therapeutic fungal polysaccharides, emphasizing their enormous potential as innovative natural products for a wide range of biological uses.