Extrication from the use of fossil-based products has grown more critical in recent years. This disengagement has been driven by deliberate environmental campaigns focusing on climate change and global warming threats and their consequences to humanity. As such, innovative replacements for fossilbased products, primarily by biobased materials, have recently been of considerable interest. Among the biobased materials, mycelium-bound biocomposites enhanced biologically or by nontoxic additives are one of the most creative and ecofriendly solutions because it fulfills the three pillars of sustainable development with positive impacts via circular economy design principles. In this review, the potential of mycelium-bound biocomposites is elucidated by comprehensively covering their state-of-the-art production from design strategies (variety of species, substrates, additives, and growth conditions) to postprocessing techniques and the resulting advanced material features. This review also covers the intriguing and growing areas of applications for mycelium-bound biocomposites, as well as the future outlook for enhanced material circularity and sustainability.