Fungal proteins are highlighted for their nutritional value and bioactive properties, making them a significant alternative to traditional protein sources. This review evaluates various green extraction technologies, including enzymatic-, ultrasound-, higher-pressure homogenization-, microwave-assisted, pulsed electric fields-, and supercritical fluid-assisted extraction, focusing on their effectiveness in disrupting fungal cell walls and preserving protein integrity. The findings indicate that these technologies could have the potential to improve protein yield and quality, addressing the challenges posed by fungal cell walls’ complex and resilient structure. The review also underscores the bioactivities of fungal proteins, including antifungal, antibacterial, antioxidant, and anticancer properties. The conclusion emphasises the need for further optimisation and scaling of these technologies, as well as exploring a wider range of fungal species to fully understand their potential as sustainable protein sources. Future research directions include refining extraction methods, integrating multiple approaches, and utilising novel green solvents to maximise efficiency and yield.