White-rot fungi require trace amounts of essential heavy metals such as Cd, Mn or Zn for their growth, but these metals are toxic when present in excess. Toxic heavy metals can inhibit the growth, cause morphological and physiological changes and affect the reproduction of Basidiomycetes. Fungal species and strains differ in their sensitivity towards metals and in the protection mechanisms involved. The toxicity of some heavy metals such as Hg, Cu or Ni has been used for the development of antifungal wood preservatives. Extracellular ligninolytic and cellulolytic enzymes are regulated by heavy metals on the level of transcription as well as during their action. During the degradation of lignocellulose and xenobiotics by white-rot fungi or isolated enzymes from these fungi heavy metals interfere with both the activity of extracellular enzymes involved in the process and fungal colonization. The ability of white-rot fungi to adsorb and accumulate metals together with the excellent mechanical properties of fungal mycelial pellets provide an opportunity for application of fungal mycelia in selective sorption of individual heavy metal ions from polluted water.