The textile industry generates large quantities of effluent contaminated with heavy metals, dyes, and other hazardous chemicals, and thus, it is one of the leading sources of worldwide water pollution. Using fungi as bioremediation agents, which has been of great interest recently, proves to be an efficient substitute for treating textile wastewater. Because of their distinct enzymatic nature, fungi can break down all pollutants, encompassing toxic chemicals and recalcitrant dyes with resistance to degradation properties, making this process sustainable and a long-lasting source of wastewater remediation. This study investigates the role of fungi in treating wastewater produced from textile manufacturing with clear indications of benefits over traditional methods, mechanisms and scope of uses. This chapter explains the efficiency of fungal-based treatment systems in reducing pollutant concentrations and enhancing water quality using case studies and empirical data. In addition, it discusses new methods and future trends for developing fungal treatment technologies. This chapter provides an overall evaluation of the ability of fungi to revolutionise wastewater treatment in the textile industry by discussing the opportunities and challenges of fungal bioremediation.