Kingdom Fungi comprises the fungi, such as mushrooms, molds, and yeasts, eukaryotic heterotrophs that digest food outside of their bodies. Most fungi are multicellular, but some, the yeasts, are simple unicellular organisms probably evolved from multicellular ancestors. Fungi are present all over the world, in marine as well as terrestrial environments. Many fungi have symbiotic relationships with plants known as mycorrhizae; in fact, it was as mycorrhizal partners of plants that fungi probably first moved onto land. Most fungi are decomposers, breaking dead organisms down into detritus and returning inorganic nutrients to the ecosystem. As such, fungi are also extremely adaptable, and can break down many substances, including some toxic pollutants. This adaptability also accounts for the presence of fungi in many very different environments around the world.

A fungal organism consists of a mass of threadlike filaments called hyphae, which combine to make up the fungal mycelium. Each hypha is composed of a chain of fungal cells, or, in some organisms, a continuous cytoplasm with many nuclei. The hypha is surrounded by a plasma membrane and a cell wall, which is made of the polysaccharide chitin, in contrast to plant cell walls made of cellulose. The hyphae in a fungus branch off of one another to form the mycelium, and are all ultimately connected to the original hypha. Though fungal cells and hyphae are nonmotile, and never have flagellated cells of any kind, a fungal mycelium can expand quickly through very rapid mitotic growth, adding up to a kilometer of new hyphae per day. For large underground mycelia, fruiting bodies grow above ground, such as the mushroom, which is only an extension of an underground mycelium. These fruiting bodies are the reproductive structures of the mycelium.

Due to the structure of the hyphae, the mycelium has a very high surface area to mass ratio, despite its large size. This allows the fungus to absorb large quantities of nutrients from its surroundings, after secreting digestive enzymes and digesting its food outside of its body. This ability to intake large quantities of nutrients despite a growing size is one of the prime reasons for the rapidity of mycelial growth.

Different types of fungus have different methods of reproduction. The unicellular yeasts reproduce only mitotically, while other fungi, such as mushrooms, have much more complex life cycles involving three distinct phases. These include diploid and haploid phases, like plants, but also a completely different phase: the dikaryotic phase, where two haploid nuclei of different types are present in each cell. A mature mycelium, including the fruiting bodies, is in the dikaryotic phase. Mushrooms, the reproductive structures of an underground mycelium, contain specialized cells on the underside of the cap that produce diploid zygotes through fusion of the two haploid nuclei in each cell; these zygotes are the only diploid phase of the life cycle. Immediately, each zygote undergoes meiosis to produce four haploid spores which are then released from the mushroom. Each of the spores in a mushroom will have one of two mating types, because in the original mycelium, each cell contained a nucleus of each type. The spores are carried, by wind, water, or animals, away from the original mycelium, and some will land on moist food sources, where they can germinate and begin to divide mitotically into haploid mycelia of a discrete mating type. Eventually, two nearby mycelia of different mating types will meet each other and join together, with their cells fusing but the nuclei remaining discrete. This is the beginning of the dikaryotic stage; the mycelium will soon grow reproductive structures and the life cycle begins again.

One-third of all species of fungi are mutualists, either as mycorrhizae or lichens. Mycorrhizal fungi live on the roots of plants and provide inorganic nutrients, and often resistance to some pathogens, to the plants in exchange for organic sugars. The first colonization of land by plants was facilitated, if not made possible by, the ability of mycorrhizal fungi to uptake nutrients from hostile soil. The lichens are fungi living in symbiotic relationships with algae or cyanobacteria. They consist of algae or bacteria trapped in the fungal hyphae. Though the details of this relationship are not completely understood, the fungus typically provides water and minerals for the algae or bacteria, in exchange for organic food from photosynthesis. The photosynthetic species in lichens are actually capable of living by themselves, but the fungal species depend on their counterparts for survival. Lichens can reproduce asexually when small reproductive units, consisting of both fungi and algae or bacteria, break of from the lichen and are carried by the wind to other locations; they can also reproduce sexually through independent sexual reproduction of both parts and a reattachment. Due to the effectiveness of the mutualist relationship in lichens, they can grow in the most inhospitable of terrestrial habitats, and often serve as key organisms in the primary succession of a habitat.

Fungi are often directly involved in our lives. Some fungi are parasitic, and cause devastating plant infections, though only about 50 species are known to harm animals. Serious agricultural pests, parasitic fungi such as the rusts and the smuts can ruin entire crops, especially affecting cereals such as wheat and corn. Fungi are also important in agriculture and food production; mycorrhizal fungi render increased disease resistance to some plants, yeasts are necessary for bread baking, and we eat many fungi, such as the mushrooms. Many medical applications of fungi have recently been discovered, especially antibiotics produced by fungi. The first among these is penicillin, possibly the most important non-genetic medical breakthrough of the century.