Fungi are one of the most important and widespread components of the biosphere, and are essential for the growth of over 90% of all vascular plants. Although they are a separate kingdom of life, we know relatively little about the origins of their ubiquitous existence. This reflects a wider ignorance arising from their status as indeterminate organisms epitomized by extreme phenotypic plasticity that is essential for survival in complex environments. Here we show that the fungal phenotype may have its origins in the defining characteristic of indeterminate organisms, namely their ability to recycle locally immobilized internal resources into a mobilized form capable of being directed to new internal sinks. We show that phenotype can be modelled as an emergent phenomenon resulting from the interplay between simple local processes governing uptake and remobilization of internal resources, and macroscopic processes associated with their transport. Observed complex growth forms are reproduced and the sensitive dependence of phenotype on environmental context may be understood in terms of nonlinearities associated with regulation of the recycling apparatus.