Fungi are diverse and have important applications; however, mycotoxins produced by certain fungal species pose a major global challenge to food safety. These secondary metabolites mostly exhibit stable physicochemical properties, allowing them to persist throughout various stages of production and processing, posing a serious threat to human and animal health. This review first establishes the theoretical foundation by reviewing the types of fungi, types of mycotoxins, their physicochemical properties, and biosynthetic pathways. It then conducts a systematic literature review on the beneficial applications of fungi, the toxic effects and mechanisms of major mycotoxins, as well as risk management strategies and regulatory limits for mycotoxin contamination. The results demonstrate that fungi play critical roles in various fields such as food, pharmaceuticals, and nutraceuticals. Mycotoxins exhibit broad-spectrum, multi-target toxicity, mediating their toxic effects on humans and animals through complex molecular pathways. Certain risk management strategies and regulatory limits have been established to control mycotoxin contamination. Future efforts should focus on mechanism-oriented strain breeding and enhanced research on mixed mycotoxin exposure, and the establishment of intelligent, biology-driven whole-chain risk management strategies to safeguard food and public health security while promoting the safe utilisation of fungal resources.