Mushrooms are considered as a unique superfood because of their low-fat content, high protein levels, and various bioactivities. Although having global popularity, the mechanisms of action that contribute to their health benefits need further investigation to elucidate the structure–activity relationship and inform future industry practices. Mushrooms serve as a significant source of ligninolytic enzymes and enzymes involved in the biosynthesis of secondary metabolites, making them regarded as promising biocatalysts for organic synthesis. Numerous bioactive substances with notable pharmacological properties, including triterpenoids, polysaccharides, phenolics, and sterols, are produced by mushrooms. However, these natural compounds’ stability and bioavailability frequently restrict their potential for therapeutic use. An inventive, environment-friendly technique for enhancing the qualities of substances produced from mushrooms is enzymatic and microbiological biotransformation. Laccases, peroxidases, and cytochrome P450s are examples of enzymatic systems that allow for selective changes to improve solubility and bioactivity. Similar to this, complicated, multistep conversions and the production of novel derivatives are made possible by microbial biotransformation, which involves filamentous fungus, yeasts, and bacteria. The mechanisms, uses in the pharmaceutical and nutraceutical industries, and upcoming difficulties of the enzymatic and microbial biotransformation of substances obtained from mushrooms are the main topics of this review. The integration of these biotechnologies offers significant promise for the development of bioactive products with improved properties and broader applications.