Over the past three decades, a wealth of studies has shown that palm trees (Arecaceae) are a diverse habitat with intense fungal colonisation, making them an important substratum to explore fungal diversity. Palm trees are perennial, monocotyledonous plants mainly restricted to the tropics that include economically important crops and highly valued ornamental plants worldwide. The extensive research conducted in Southeast Asia and Australasia indicates that palm fungi are undoubtedly a taxonomically diverse assemblage from which a remarkable number of new species is continuously being reported. Despite this wealth of data, no recent comprehensive review on palm fungi exists to date. In this regard, we present here a historical account and discussion of the research on the palm fungi to reflect on their importance as a diverse and understudied assemblage. The taxonomic structure of palm fungi is also outlined, along with comments on the need for further studies to place them within modern DNA sequence-based classifications. Palm trees can be considered model plants for studying fungal biodiversity and, therefore, the key role of palm fungi in biodiversity surveys is discussed. The close association and intrinsic relationship between palm hosts and palm fungi, coupled with a high fungal diversity, suggest that the diversity of palm fungi is still far from being fully understood. The figures suggested in the literature for the diversity of palm fungi have been revisited and updated here. As a result, it is estimated that there are about 76,000 species of palm fungi worldwide, of which more than 2500 are currently known. This review emphasises that research on palm fungi may provide answers to a number of current fungal biodiversity challenges.