Fuente: Green Extration Byproduct Fungal biotechnology is rapidly gaining recognition for its potential to drive sustainable innovations across industries. Harnessing the unique biological properties of fungi, such as their potent enzymatic activity and resource-efficient growth, enables transformative applications in bioremediation, renewable energy production, food innovation, and biomaterials development. Fungi play a critical role in promoting the circular economy (CE) principles by effectively recycling trash, turning biomass into useful products, and regenerating resources. This chapter examines the integration of fungal biotechnology within the CE framework, showcasing how fungi enable organic waste recycling, bioconversion of agricultural and industrial residues, and sustainable product development. Real-world examples, such as oil spill remediation using Pleurotus species, heavy metal detoxification by Aspergillus and Trametes, and innovations like mycelium-based packaging and fungal proteins for alternative food sources, highlight fungi’s practical impact. The chapter is organized to first introduce fungal biotechnology and CE fundamentals, followed by sections detailing fungal contributions to waste upcycling, regenerative resource use, and material loop closure. It further presents success stories, discusses existing challenges in scaling and regulation, and proposes future research priorities including advances in genetic engineering, artificial intelligence applications, and policy frameworks to foster large-scale fungal innovation within a sustainable circular economy.