Mycelium is a promising biomaterial that has recently gained popularity. This fungi-based material has been developed as an alternative solution to global environmental issues caused by non-renewable conventional materials, such as plastic. Often such environmental problems arise from material extraction, unsustainable manufacturing, pollution, and design practices. The study in this paper focuses on the perception and experiences of design students and designers to explore the potential and challenges of Mycelium for product design. Building on two workshops, survey answers of participants, and researchers’ observations, the paper studies how first-time users characterize this material to develop solutions for expanding its boundaries. The aim is to highlight and explore mycelium’s potential to revolutionize the intersectionality of sustainable design practices and manufacturing processes. The study also addresses the challenges of the material being functional at the mass production level. The findings provide insights into how the new material can be utilized in industrial product design and design education, opening pathways for novel, nature-inspired solutions to contemporary global issues.