Our planet offers many opportunities for life on the edge: high and low temperatures, high salt concentrations, acidic and basic conditions and toxic environments, to name but a few extremes. Recent studies have revealed the diversity of fungi that can occur in stressful environments that are hostile to most eukaryotes. We review these studies here, with the additional purpose of proposing some mechanisms that would allow for the evolutionary adaptation of eukaryotic microbial life under extreme conditions. We focus, in particular, on life in ice and life at high salt concentrations, as there is a surprising similarity between the fungal populations in these two kinds of environments, both of which are characterized by low water activity. We propose steps of evolution of generalist species towards the development of specialists in extreme habitats. We argue that traits present in some fungal groups, such as asexuality, synthesis of melanin-like pigments and a flexible morphology, are preadaptations that facilitate persistence and eventual adaptation to conditions on the ecological edge, as well as biotope switches. These processes are important for understanding the evolution of extremophiles; moreover, they have implications for the emergence of novel fungal pathogens.