Industrial progress has dramatically increased the release of highly toxic xenobiotic compounds into the environment, many of which are resistant to natural degradation. Addressing this critical issue necessitates innovative and sustainable treatment solutions. Myco-remediation, using fungi for pollutant degradation, has emerged as a promising approach due to fungi’s robust metabolic capabilities. White rot fungi, including Bjerkandera adusta, Phanerochaete chrysosporium, Pleurotus sp., and Trametes versicolor, are particularly effective in breaking down diverse toxic pollutants such as synthetic dyes, plastics, organophosphate pesticides, and pharmaceutical personal care products. This efficiency is attributed to their production of extracellular enzymes such as laccase, peroxidase, cutinase, and lipase, as well as intracellular cytochrome P450 monooxygenase. However, the activity and durability of these enzymes are influenced by environmental factors, including pH, temperature, availability of minerals, and presence of co-substrates. This chapter highlights the potential of fungal enzymes in xenobiotic degradation, emphasizing the critical role of lignin-modifying enzymes. Future advancements should focus on optimizing operational parameters, developing innovative enzyme immobilization methods, and scaling up biotechnological applications to enhance the effectiveness of fungal enzymes in mitigating environmental contamination.