The extracts from fruitbodies and hyphae have a huge repertoire of biologically active compounds such as phenolic acids, ergosterols, sugar polymers, peptides, proteins, and terpenoids which have anti-inflammatory, anti-aging, antioxidant, anti-tyrosinase, anti-hyaluronidase, antidiabetic, and anti-allergic effect. All these attributes not only make these extracts a perfect candidate to be formulated into cosmeceuticals which are commercially beneficial in two ways: first, it gives a medical benefit to the consumer who uses it; second, it gives an aesthetic benefit by enhancing the appearance of the skin. The antioxidant, antibacterial, and anti-inflammatory effects of these extracts make them ideal for being used as a skincare product for individuals with skin diseases or allergic tendencies. Mushrooms with high chitosan and chitin content have a propensity to increase the growth of keratinocytes and fibroblasts and hence have healing effect. The novel bioactive compounds can be extracted using different solvents and characterized by different advanced techniques like Reverse Phase, Gas Phase or High Pressure Liquid Chromatography, Mass Spectrometry, etc. With increase in the number of data generated by automated processes, the probability of finding new bioactive compounds becomes higher, greater the number of bioactive compounds, the greater the production of new types of products which have a variety of applications.