In the present era of the industrial revolution, chemical-based agriculture practices, and urbanization, the environment has severe repercussions from various xenobiotics and has become a pitfall worldwide. Xenobiotic compounds such as heavy metals, dyes, polycyclic aromatic hydrocarbons (PAHs), oil spills, pharmaceuticals' active compounds (PhACs), and agrochemicals show detrimental effects on the environment through long-term persistence causing biomagnification, pollution, etc. In the last few decades, researchers have dedicated themselves to developing different physical and chemical remediation methods, although facing several drawbacks and challenges and searching for eco-friendly alternatives like bioremediation. Conventionally bioremediation utilizes biological agents such as plants, microbes, fungi, etc. To reduce environmental pollutants' effects. Although conventional bioremediation has certain limitations, SMS (spent mushroom substrate) has recently drawn great attention worldwide because of its low cost, environment-friendly nature, easy availability, and higher remediation efficiency. Scientists have used waste mushroom SMS for bioremediation purposes for various xenobiotic compounds. Therefore, the present review's foremost aim is to encompass the role of mushroom SMS in the remediation of xenobiotic compounds, techniques for studying the adsorbent properties of SMS, factors affecting the adsorption process, and the probable mechanism involved in its remediation process. This study has noteworthy findings implying that eco-friendly multi-purpose SMS has great efficacy against environmental contaminants, and its removal efficiency gets increased with combinatorial approaches like SMS amendments (biochar, etc), phytoremediation, rhizoremediation, and nanoremediation. Various mechanisms, including ion exchange, free radical reactions, enzymatic processes, microbe-mediated remediation, permeation, and chelation, may play a role in SMS-mediated groundwater and environmental contaminant remediation.