Nanoparticles derived from mushrooms have attracted a lot of attention lately because of their special qualities and possible medical uses. This manuscript provides a systematic overview of the diverse types of mushrooms utilized in nanoparticle synthesis, highlighting their nutritional profiles and the methods employed to produce these nanoparticles. The review focuses on the antimicrobial and anticancer properties of mushroom-derived nanoparticles, detailing their mechanisms of action. We explore how different mushroom species contribute to nanoparticle synthesis, emphasizing the role of metal oxides in enhancing therapeutic efficacy. Key findings include the ability of these nanoparticles to exhibit potent antimicrobial activity through disruption of microbial cell membranes and their anticancer effects via induction of apoptosis and modulation of signaling pathways. Additionally, the manuscript addresses the use of metal oxide-based mushroom nanoparticles, such as those incorporating zinc oxide and titanium dioxide, in various medicinal applications, including their roles in drug delivery and wound healing. Finally, we discuss future directions for research, including the need for further investigation into the safety profiles of mushroom-based nanoparticles and the development of innovative applications in personalized medicine. This review aims to consolidate current knowledge and provide a roadmap for future studies in the field of mushroom-based nanomedicine.