Mushrooms have long been recognized for their medicinal properties, particularly in the treatment of cancer and neurodegenerative diseases. Bioactive compounds derived from various mushroom species exhibit potent anticancer, anti-inflammatory, antioxidant, hepatoprotective, immunomodulatory, antibacterial, and neuroprotective effects. In cancer therapy, polysaccharides such as β-D-glucans, Lentinan, and PSK have demonstrated the ability to increase the immune system’s cell-mediated response, helping to inhibit tumor growth and improve patient outcomes. These compounds function as biological response modifiers, stimulating immune cells like macrophages, natural killer cells, and T lymphocytes. Regarding neurodegenerative diseases, mushrooms produce neuroprotective compounds, including antioxidants, phenolics, and ergothioneine, that help mitigate oxidative stress and inflammation, both of which are critical factors in disorders such as Alzheimer’s and Parkinson’s disease. Collectively, these findings underscore the promising potential of mushrooms as natural agents in adjunct therapies for cancer and neurodegenerative disorders, offering a foundation for the development of innovative functional foods and pharmaceuticals.