Mycelium composites are an emerging class of cheap and environmentally sustainable materials that can improve the energy performance of building. Manufacturing of Styrofoam and plastic construction materials greatly contribute to global warming by the discharge of chemical and hazardous waste materials to the environment. This condition or situation can be avoided by usage of bio-based, biodegradable materials in the environment. Mycelium composite materials are such type of materials that is made from mycelium (fungal threads network) and wood sawdust that is easily available. This project on mycelium building materials conveys that they can be used as a better insulation because of its low thermal conductivity properties. Materials made of mushrooms are strong and inherently fire resistant, and they are simple to mould. Using mycelium in building provides fantastic prospects for repurposing agricultural waste into a reasonably priced, environmentally friendly, and biodegradable material substitute. They protect the environment and are carbon neutral.