Medicinal properties have been attributed to mushrooms for thousands of years. Mushroom extracts are widely sold as nutritional supplements and touted as beneficial for health. Yet, there has not been a critical review attempting to integrate their nutraceutical potential with basic science. Relatively few studies are available on the biologic effects of mushroom consumption, and those have been performed exclusively in murine models. In this paper, we review existing data on the mechanism of whole mushrooms and isolated mushroom compounds, in particular (1-->3)-beta-D-glucans, and the means by which they modulate the immune system and potentially exert tumor-inhibitory effects. We believe that the antitumor mechanisms of several species of whole mushrooms as well as of polysaccharides isolated from Lentinus edodes, Schizophyllum commune, Grifola frondosa, and Sclerotinia sclerotiorum are mediated largely by T cells and macrophages. Despite the structural and functional similarities of these glucans, they differ in their effectiveness against specific tumors and in their ability to elicit various cellular responses, particularly cytokine expression and production. Unfortunately, our data base on the involvement of these important mediators is still rather limited, as are studies concerning the molecular mechanisms of the interactions of glucans with their target cells. As long as it remains unclear what receptors are involved in, and what downstream events are triggered by, the binding of these glucans to their target cells, it will be difficult to make further progress in understanding not only their antitumor mechanisms but also their other biological activities.