Fungi are one of the most excellent producers of several hydrolytic enzymes including cellulases, hemicellulases, and laccases. The efficiency of these enzymes can become restricted due to several physiological and genetic factors. Certain environmental conditions such as pH, temperature, substrate, moisture, etc. can influence the production of hydrolytic enzymes in fungi. Metabolic engineering provides a lucrative option to enhance the efficiency of these enzymes’ industrial applications. In this chapter, we discuss the strategies used for engineering the metabolic pathways in fungi for enhanced production and bioactivity of lignocellulolytic and cellulolytic enzymes. The chapter also explains the applications of metabolically engineered fungal enzymes’ production based on practical examples. Additionally, this chapter also delivers an understanding of the challenges and future prospects of metabolic engineering in fungi for leveraging it as an eco-friendly approach for industrial applications.