Fungi offer a promising solution for sustainable protein production and global food security as single-cell protein sources (SCPs). Their rapid growth, diverse substrate utilization, and high protein content make them attractive candidates. Key fungal species, including filamentous fungi and yeasts, are explored for their characteristics and applications. Various substrates, focusing on waste valorization and circular economy integration, are analyzed for fungal SCP production. Bioprocess engineering aspects, such as fermentation methods, bioreactor designs, and process optimization, are discussed. The nutritional value, safety, and diverse applications of fungal SCPs, ranging from food and feed to nutraceuticals, bioelectronics, and sustainable packaging materials, are examined. Challenges in scaling up fungal SCP production, including technical, economic, and consumer acceptance issues, are addressed, along with advances in genetic engineering, biorefinery integration, and novel extraction technologies. The economic and environmental impacts of fungal SCP production are evaluated.