Mushrooms are the fungi that have been used as food since time immemorial. Nutritionally they are a valuable source of health food, which is low in calories, and rich in carbohydrates, essential amino acids, fibre, important vitamins and minerals. Mushrooms have also been used in medicine for centuries in the Orient but their potential as health potentiators and elicitors of immune system is recent. In the last two decades there has been an upsurge on the use of mushrooms as nutraceuticals and many edible species have been thoroughly investigated and authenticated for medicinal use. The species that have been properly analysed for medicinal value are: Ganoderma lucidum (Reishi), Lentinus edodes (Shiitake), Grifola frondosa (Maitake), Agaricus blazei (Hime-matsutake), Cordyceps militaris (Caterpillar fungus), Pleurotus ostreatus (Oyster mushroom) and Hericium erinaceous (Lions mane). There are many more species of cultivated and wild edible and non-edible mushrooms that have been analysed for both their nutritional and nutraceutical components but to a lesser extent than those listed above. The active constituents found in mushrooms are polysaccharides, dietary fibres, oligosaccharides, triterpenoids, peptides and proteins, alcohols and phenols, and mineral elements such as zinc, copper, iodine, selenium and iron, vitamins, amino acids etc. These have been found to boost the immune system, have anti-cancerous properties, act as anti-hypercholesterolaemic and hepato-protective agents, show anti-HIV activity and anti-viral activity, and ameliorate the toxic effect of chemo- and radiotherapy. Many of the species are known to be aphrodisiacs. Many commercial products from these mushrooms are available in the market. Prominent among these are: Lentinan from Lentinus edodes, Concord Sunchih and Reishi Plus from Ganoderma lucidum, Grifon from Grifola frondosa and Didanosine from Cordyceps militaris. The nutraceuticals have been found to relieve the stress and pressure of modern society by stimulating both basic and secondary immune responses of the immune system. There are more than 5000 species of mushrooms recorded from all over the world out of which around 2000 are identified as edible. A large number of the species are yet to be analysed for their nutraceutical/medicinal potential.