In recent years, there has been an intensive research on fungal decolorization of dye wastewater. It is becoming a promising alternative to replace or supplement present treatment processes. This paper examines various fungi, living or dead cells, which are capable of decolorizing dye wastewaters; discusses various mechanisms involved; reports some elution and regeneration methods for fungal biomass; summarizes the present pretreatment methods for increasing the biosorption capacity of fungal biomass; discusses the effect of various factors on decolorization.