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The cosmetic industry is constantly in search of ingredients from natural sources because of their competitive effectiveness and lower toxicity effects. Mushrooms have been an important part of our diet for years and are now finding their way as cosmetic ingredients, either as cosmeceutical or as nutricosmetics. The present review focuses on the most relevant activities of mushroom extracts, as well as on their bioactive compounds, which make them interesting ingredients for cosmetic formulations. Mushroom extracts, as well as their bioactive metabolites, revealed anti-tyrosinase, anti-hyaluronidase, anti-collagenase and anti-elastase activity. Emphasis was also given to their important anti-oxidant, antimicrobial and anti-inflammatory potential, topics largely studied by numerous authors, making them very versatile and multi-functional cosmetic ingredients. Some of the bioactive compounds and the mechanism responsible for the activities ascribed to mushrooms were highlighted. Other activities were identified as needing to be further studied in order to identify the major compounds contributing to the target activity, as well as their mechanisms of action. Based on the above findings, mushroom extracts, as well as their bioactive metabolites, constitute important ingredients that can help to combat aging, reduce the severity of inflammatory skin disease and correct hyperpigmentation disorders. These findings and claims must be correctly supported by clinical trials and in vivo studies.