Microbes are ubiquitous in nature, and plant-microbe interactions are a key strategy for colonizing diverse habitats. Fungi are producing a wide range of secondary metabolites and bioactive compounds, which are probable alternative sources of drugs and/or antibiotics. Fungi are associated with the crops and plays an important role in plant growth promotion and enhanced soil fertility using different PGP mechanism such as solubilization of phosphorus, zinc, potassium; production of plant growth regulator (auxins, cytokinin, gibberellins, ethylene and abscisic acid); hydrolytic enzymes (xylanases, laccase, pectinases, cellulases); and siderophores. Besides eliciting plant defence reaction against pathogens; PGP fungi also help in plant growth promotion and alleviation of different abiotic stresses under harsh environments. The PGP fungi have reported from different genera of phyla Chytridiomycota, Zygomycota, Glomeromycota, Ascomycota, and Basidiomycota. Fungi also have significant potential applications in various industries like medical, and food. In the medical applications, fungi and fungal products are used to control disease in human and animals. In the fermentation industries fungi used to make alcoholic beverages, cheeses, bread, kefir, yogurt and various other food preparations and the agricultural sectors used to make plant healthy and protects to pathogens. The present review, deals with the biodiversity of beneficial fungi from different habitats and their biotechnological applications in plant growth promotion and soil health.