Edible mushrooms are ubiquitous around the world due to their enormous health benefits. Mushrooms have been used as folk medicine and healthy food from ancient times but their health-promoting effects have not been explored. As a superfood, mushroom powder is an essential component of the human diet for improving health and immunity. Bioactive components present in them such as proteins, polysaccharides, terpenes, and lipids have recently sparked much attention to exhibit therapeutic properties such as anti-cancer, immunomodulatory, anti-hypercholesterolemia, antiviral, antidiabetic, and anti-inflammatory effects. Moreover, these isolated compounds have the potentiality to be used in dietary supplements and medicines. In addition, numerous bioactive compounds such as ergosterol, gallic acid, and cordycepin proved to be essential in preventing or reducing the severity of COVID-19. This review unveils a comprehensive understanding of the nutraceutical as well as the medicinal potential of mushrooms and their applications in food products for human wellness. © 2022 Elsevier Ltd