Background and objective: Fungal empyema is a rare entity which is associated with high mortality. It is mostly seen in immune-compromised hosts. However, there is limited data available on fungal empyema from developing countries regarding risk factors, treatment, and outcome. This study was conducted to determine the risk factors, clinical features, treatment, and outcome of fungal empyema. Methods: A retrospective observational study was performed on proven fungal empyema cases, admitted at Aga Khan University Hospital, Karachi, Pakistan during January 2018 to May 2021. We excluded all those patients with polymicrobial bacterial and fungal empyema or with negative pleural fluid cultures. A preformed questionnaire was filled out for each case. Results: A total of 26 patients were diagnosed with fungal empyema with a mean age of 43.6 ± 20.3 years. Of these, 16 (61.5%) patients were male. Diabetes mellitus was the most frequent comorbidity ( n = 11, 42.3%), followed by hypertension ( n = 9, 34.6%), malignancy ( n = 6, 23.1%), and asthma ( n = 1, 3.8%). Ten (38.5%) patients had multiple comorbidities. Candida spp. was isolated in 21 (80.8%) patients and Aspergillus spp. in 7 (26.9%) patients. Fusarium spp. was isolated from one (3.9%) patient. Video-assisted thoracoscopy surgery was done in 14 (53.8%) patients and 12 (46.1%) patients were managed with tube thoracostomy. Twenty-one (80.8%) patients received antifungal agents. Overall, in-hospital mortality was 38.5% ( n = 10) and all patients developed respiratory failure. Clinical improvement was seen in 16 (61.5%) patients. Conclusion: Our data suggest that fungal empyema has a poor outcome as almost one-third of our patients died. Early diagnosis and intervention can improve outcome.