The environment is at risk from environmental contamination caused by both organic and inorganic contaminants. In recent times, there has been a notable surge in the frequency and endurance of pollutants. There have been several methods used to improve naturally occurring water quality to a level fit for human consumption. Within this framework, the use of state-of-the-art nanotechnology to traditional process engineering opens the door for technological advances in advanced water and wastewater technology. The wastewater originating from various key sectors, including agriculture, industries, and households, is diverse and requires appropriate treatment prior to release into the environment. Untreated wastewater has a high concentration of dissolved solids, both harmful and innocuous, which can harm aquatic life in freshwater if they are not properly handled. Wastewater needs to be properly handled because of all the negative effects it has on the environment. The distinct physical and chemical characteristics of nanomaterials increase their appeal for use in various applications. On the other hand, biotechnology is a vital component of most established companies, providing an environmentally sustainable pathway for the production of active ingredients. The growth in heavy metal ion pollution in effluents, which is brought on by growing urbanisation and human activity, is one of the most dangerous environmental contaminants. The sorption method’s low cost, design and operation flexibility, reproducibility, and notable performance make it a popular choice. To get rid of metal ions, more eco-friendly sorbents are therefore needed now more than ever. The use of fungus as adsorbent has drawn a lot of interest because of its special qualities, which include its high absorption capacity, availability, affordability, environmental friendliness, and the presence of chitin and chitosan in its cell wall. The application of certain process-induced microorganisms or the use of microorganism metabolites for synthesis and production processes in order to harness “bio-in-nanotechnology” or “nano-in-biotechnology.” Due to their ability to produce vital enzymes, acids, and biosurfactants as well as to control some pest illnesses and crops on a wide scale, fungi have garnered a great deal of scientific attention. Fungi have been effectively used in nanotechnology to produce metal and metal oxide nanoparticles, including Ag, Au, Se, Fe, Cu, ZnO, and CuO. The goal of this chapter is to illustrate the most recent developments in fungal nanobiotechnology by outlining the primary group of fungi that can be used to produce nanomaterials sustainably and their potential uses in biotechnological fields. In order to overcome this disparity, this review emphasises the potential for fungal biorefinery in specific industrial wastewaters, especially those with low pH levels. The financial effects of chemical separation and biomass recovery are also highlighted. Using a thorough examination of several industrial sectors, including paper pulp, textiles, food processing, and pharmaceuticals, this study investigates how filamentous fungus can efficiently capture wastewater’s nutrient-rich content to create useful resources.