Mushrooms have garnered considerable interest among researchers due to their immense nutritional and therapeutic properties. The presence of biologically active primary and secondary metabolites, which includes several micronutrients, including vitamins, essential minerals, and other dietary fibers, makes them an excellent functional food. Moreover, the dietary inclusion of mushrooms has been reported to reduce the incidence of aging- and lifestyle-related diseases, such as cancer, obesity, and stroke, as well as to provide overall health benefits by promoting immunomodulation, antioxidant activity, and enhancement of gut microbial flora. The multifunctional activities of several mushroom extracts have been evaluated by both in vitro and in vivo studies using cell lines along with invertebrate and vertebrate model systems to address human diseases and disorders at functional and molecular levels. Although each model has its own strengths as well as lacunas, various studies have generated a plethora of data regarding the regulating players that are modulated in order to provide various protective activities; hence, this review intends to compile and provide an overview of the plausible mechanism of action of mushroom-derived bioactives, which will be helpful in future medicinal explorations.