Highland barley bran (HBB), as a by-product during the milling of highland barley, is under-utilized. Food-grade fungi R. oligosporus and A. elegans were used in this study to improve the food quality of HBB. Macromolecular nutrients were converted into small molecules during fermentation, which was further identified by scanning electron microscope (SEM), particle size, and metabolite analysis. The insoluble fibers were effectively bio-transformed into the soluble form, inducing significant improvements in the bran’s physicochemical properties including water-holding capacity, oil-holding capacity, water solubility, and swelling capacity. The antioxidant activity of HBB was also enhanced by fungal fermentation due to the increased phenolics released by fungal enzymes. SPME-GC-MS analysis demonstrated that the HBB’s flavors were significantly improved by fungal fermentation due to the increased alcohols, hydrocarbons, and esters. Additionally, R. oligosporus fermentation tended to release phenolics to achieve high antioxidant activities, and A. elegans fermentation preferred to improve physicochemical properties to enhance the processing applicability of HBB, which were mainly due to their individualized metabolic pathways triggered during fermentation. In conclusion, fermentation with probiotic fungi significantly improved the food quality and processing applicability of HBB, implying a high application potential of fermented HBB to develop functional foods.