Boletellus russellii, Russell's Bolete

Fungi, together with bacteria, are decomposers, and their activities are necessary for the continued existence of the biosphere. Decomposition releases carbon dioxide into the atmosphere and returns nitrogenous compounds to the soil where they can be recycled by plants and eventually animals. Since fungi are decomposers, they often come in conflict with human interests and are considered a nuisance; in some cases, a destructive hazard. Fungus can break down man-made wooden structures with their powerful enzymes as well as many other substances (eg. cloth, paint, leather, petroleum, and wires). Bread, fresh fruits, vegetables, and meat are particularly susceptible to fungal attack reducing nutritional value and palatability. Fungus may also produce toxins such as aflatoxin, which is highly carcinogenic and severely affects humans even when minute amounts are consumed.

Certain fungal yeasts are useful because they produce substances such as ethanol or carbon dioxide that play a key role in the brewing, baking and winemaking industries. Fungi are also important in producing many kinds of medicines. The most important of these are antibiotics, like penicillin, which is used to kill bacterial infections.