Solid state fermentation (SSF) is considered more sustainable than traditional fermentation because it uses low amounts of water and transforms agro-industrial residues into value added products. Enzymes, biofuels, nanoparticles and bioactive compounds can be obtained from SSF. The key factor in SSF processes is the choice of microorganisms and their substrates. Many fungal species can be used and are mainly used due their lower requirements of water, O2 and light. Residues rich in soluble and insoluble fiber are utilized by lignocellulolytic fungi because they have the enzymes that break fiber hard structure (lignases, celullases or hemicelullases). During the hydrolysis of lignin, some phenolic compounds are released but fungi also synthetize compounds such as mycophenolic acid, dicerandrol C, phenylacetates, anthraquinones, benzofurans and alkenyl phenols that have health beneficial effects such as antitumoral, antimicrobial, antioxidant and antiviral activities. Another important group of compounds synthetized by fungi during fermentation are polysaccharides that also have important health promoting properties. Fungal biofermentation has also proved to be a process which can release high contents of phenolics and it also increases the bioactivity of these compounds.