The circular economy is a transformative model based on the decoupling of economic growth from the utilization of finite resources and the design of waste outside the system. Consequently, mycoremediation offers an essential strategy for sustainable waste disposal and environmental management. First, due to fungi’s numerous enzymatic capabilities, they can break down intricate organic chemicals, including intransigent environmental toxins like heavy metals, pesticides, and synthetic dyes. These organisms can transform dangerous chemicals into less harmful forms, promoting the healthy recycling of nutrients and restoring polluted properties. With these characteristics, current applications employ mycoremediation to clean soil, purify water, and clean air. Water purification methods utilize fungi to purify industrial effluents and wastewater, eliminating harmful chemicals like pharmaceuticals and hazardous chemicals. In addition, air purification utilizes fungal bio-filters to absorb and digest contaminant waste, thus contributing to pure air quality. Fungi are employed in agriculture for composting and pesticide residue mycoremediation, which uses mycorrhizae to extract and degrade chemical residues. This chapter explores the pivotal role of fungi in bioremediation processes, focusing on their ability to degrade and detoxify various pollutants, thereby contributing to the circular economy.