The chapter portrays the decentralize waste water treatment methods with the fungi materials as central core systems. The fungi based materials have various important properties which are essential for performing various redox chemistry utilized in waste water treatment or desalination treatment used in advanced oxidation process. The various merits of fungi materials includes production of enzyme material easily, ability to breakdown the complex organic moieties and other organic molecules, the fungi materials can survive in difficult conditions, these species are very fast in environmental adaptations, produce more biomass, survives at low temperature and acidic conditions (at lower pH), they can survive in lowest nutrition as well. Due to all these conditions fungi can easily breakdown many organic molecules, dyes, pesticides, herbicides, pharmaceutical waste etc. The present chapter explores the useful properties of fungi, various types of fungi useful in wastewater treatment. Additionally the chapter includes the strategies, methodologies employed in the decentralized waste water treatment such as BASTAF, ABR, Johkasou, MFC, etc. In addition to this the fungi based materials which are utilized by various researchers for waste water treatment are explored. The comparative study of the fungi materials used in effluent treatment or waste water treatment is discussed in detailed in this chapter. Furthermore, the future challenges in decentralized waste water management systems are explored in the present report.