A large amount of inedible plant material, generated as a result of plant growth in a Controlled Ecological Life Support System (CELSS), should be pretreated and converted into forms that can be recycled on earth as well as in space. The main portion of the inedible biomass is lignocellulosic material. Enzymatic hydrolysis of this cellulose would provide sugars for many other uses by recycling carbon, hydrogen, oxygen, and nitrogen through formation of carbon dioxide, heat, and sugars, which are potential foodstuffs. To obtain monosaccharides from cellulose, the protective effect of lignin should be removed. White-rot fungi degrade lignin more extensively and rapidly than other microorganisms. Pleurotus ostreatus degrades lignin effectively, and produces edible and flavorful mushrooms that increase the quality and nutritional value of the diet. This mushroom is also capable of metabolizing hemicellulose, thereby providing a food use of this pentose containing polysaccharide. This study presents the current knowledge of physiology and biochemistry of primary and secondary metabolisms of basidiomycetes, and degradation mechanism of lignin. A better understanding of the ligninolytic activity of white-rot fungi will impact the CELSS Program by providing insights on how edible fungi might be used to recycle the inedible portions of the crops.