Depression and anxiety are the leading prevalent mental health disorders globally, significantly contributing to disability and reduced quality of life. Scientific interest in medicinal mushrooms as alternative or complementary treatments for depression and anxiety is rapidly increasing. These natural compounds are being explored for their potential to address limitations of conventional pharmacological therapies, which are often associated with side effects, delayed onset of action, and treatment resistance. Several medicinal mushroom species,—such as Hericium erinaceus, Cordyceps militaris, and Ganoderma lucidum—have demonstrated neuroprotective, anti-inflammatory, and mood-regulating properties in preclinical studies and early-stage clinical research. These effects are mediated by mechanisms such as modulajtion of serotonin receptors, anti-inflammatory activity, enhancement of neuroplasticity, and gut–brain axis regulation. Despite promising outcomes, major challenges remain. These include legal and ethical barriers, dosing inconsistencies in natural products, lack of large-scale randomized clinical trials, and limited understanding of long-term safety. It concludes by calling for more rigorous clinical research and standardized methodologies to support the integration of mushroom-based therapies into mainstream mental health care.