Human space exploration increasingly relies on sustainable, self-regenerating biological systems to address challenges such as radiation protection, habitat materials, life-support stability, and food production. In recent years, mushrooms and filamentous fungi have emerged as promising biological platforms because of their metabolic versatility, structural robustness, and adaptability to extreme environmental conditions. This review aims to consolidate the current knowledge on fungal and mycelium-based technologies pertinent to space missions and assess their potential for application in Lunar and Martian habitats. It also emphasizes recent advancements in fungal radiation shielding, mycelium-based construction materials, bioregenerative life support systems (BLSS), waste recycling, and nutrient-rich food production. The field of fungal synthetic biology has seen significant advancements, particularly in the engineering of melanin pathways, development of self-healing mycelial materials, and integration of bioelectronic functionalities, all of which contribute to pioneering “living material” concepts. Insights from spaceflight and microgravity simulation studies were integrated to evaluate the technological readiness of these innovations and identify persisting challenges. Thus, mycelium-based systems present a versatile and scalable approach for future spacehabitat development. However, challenges remain, including regulating growth in microgravity, ensuring mechanical reliability, maintaining biosafety, and achieving long-term radiation resistance. Consequently, targeted research integrating space biology experiments, genetic engineering, and advanced biomanufacturing is recommended to facilitate the adoption of fungal technologies for sustainable, long-term missions.