Mushroom extracts have been extensively studied for their medicinal effects. They can stimulate immune responses and thus have been explored in cancer treatment. Recently, it has also been shown that some mushroom extracts can produce direct cytotoxic effect on cancer cells. In this review, we summarize the cytotoxic effect of mushroom extracts in cancer treatment revealed by both in vitro and in vivo studies. We also summarize the current understanding of the mechanisms associated with such an effect with an emphasis on the mitochondrial apoptotic pathway. The recent finding that mushroom extracts have direct cytotoxic effects supplements their known immune stimulating effects. Thus, novel anticancer agents based on new findings from mushroom extracts may soon be added to the present pool of anticancer drugs. Specifically, we propose that nanodelivery of the bioactive compounds of mushroom extracts to mitochondria will further increase their potential treatment efficacy.