Mycelium-based composites hold significant potential as sustainable alternatives to traditional materials, offering innovative solutions to the escalating challenges of global warming and climate change. This review examines their production techniques, advantages, and limitations, emphasizing their role in addressing pressing environmental and economic concerns. Current applications span various industries, including manufacturing and biomedical fields, where mycelium-based composites demonstrate the capacity to mitigate environmental impact and enhance economic sustainability. Key findings highlight their environmental benefits, economic viability, and versatile applications, showcasing their potential to revolutionize multiple sectors. However, challenges such as consumer acceptance, intrinsic variability, and the need for standardized guidelines persist, underscoring the importance of further research and innovation. By optimizing material properties and refining production processes, mycelium-based composites could pave the way for widespread adoption as sustainable materials, contributing to a greener and more environmentally conscious future.