Production of vast amounts of waste material routinely has prompted the interest of researchers to conserve and manage biomass waste. The recycling of organic waste material could produce various value-added bioproducts beneficial for human beings and the environment. Traditional decomposition methods have been reported, but the efficiency of these fermentation methods was comparatively low and expensive, limiting their use. Currently, researchers have moved their concern toward green pretreatment methods, including enzymatic techniques and biological decomposition purposes. Among biological sources, the fungal fermentation system has offered a more efficient and sophisticated method because of higher production of bioproducts, greater efficiency, environmentally safe, and cost-effectiveness compared to previous methods. The present study reviewed the advantages of fungi-mediated conversion of waste-activated sludge into value-added bioproducts to help the researchers in sustainable management of waste and shed light on limitations of previous methods.