Cultivable fungi are increasingly gaining popularity in medicinal cosmetics due to the associated bioactive fungal compounds laced with numerous health benefits. Fungal compounds used in medicinal cosmetics are safe, ecofriendly, and sustainable. Mushrooms, molds, and yeasts are grown on cheap agricultural and industrial wastes to produce valuable fungal products which are highly beneficial to human health. Ganoderma, Cordyceps, Inonotus, Agaricus, Grifola, Lentinula, Pleurotus, Volvariella, and Auricularia are among the cultivable mushrooms discussed. Ergosterol is known to promote wound healing due to its anti-inflammatory and antibacterial properties. Lactic acid serves as the bioactive agent to reduce acne, remove dead cells, lighten the skin, prevent skin wrinkle, and damage from sunlight while ceramides serve as epidermal hydrating agent and improve skin texture. Extracts of cultivable fungi play key role in inhibition of major enzymes such as tyrosinase, hyaluronidase, elastase, and collagenase which are essential in skin hyperpigmentation and aging. They offer promising effect in the promotion of hair growth and protection against hair breakage and alopecia. Factors affecting growth, development of fruiting body, and production of fungal metabolites as well as the solutions are discussed. Cultivable fungi can provide natural, safe, effective, and sustainable ingredients for medicinal cosmetics.