How do fungi benefit the environment?

Cell walls of plants are made of cellulose and other large molecules. Animals are unable to digest cellulose. It's the major source of non-digestible fiber in our diets. Luckily fungi and other microorganisms are able to break down these compounds. If this were not the case then plant material, especially wood, would never rot and instead pile up, trapping high amounts of carbon and dropping the level of atmospheric carbon dioxide, seriously limiting future plant growth. Fungi are crucial recyclers! They release carbon, nitrogen and other needed nutrients for organisms and enrich the soil. But what about wood-eating termites and ruminants such as cows? Their guts contain specialized fungi and bacteria for plant digestion!

Mycorrhizae greatly increase a plant's uptake of nutrients, especially phosphorus and nitrogen, increase water uptake, and provide protection against soil pathogens. In exchange the fungi obtain sugars and other compounds. The vast majority of terrestrial plants, from oak trees to lawn grass and petunias, have mycorrhizal fungi helping them grow. Many plants utilize one kind of microscopic fungi within their roots (endomycorrhizae formed by zygomycetes). Most conifers and many hardwoods (e.g., birch, oak, aspen families) are partners with larger fungi which form fruitbodies or mushrooms. These ectomycorrhizae (meaning outside - fungus - roots) are formed by many basidiomycetes and certain ascomycetes. The sheathing fungus forms an interface between the root and the soil. Associations can be very specific. Certain Suillus grow only with white pine (five-needle pine) while other Suillus species associate with two-needle pines. Other fungi are not as choosy and may even form interconnections between different plant species. Recent studies show that net carbon flow can occur between two tree species (e.g., birch and spruce) via the mycorrhizal fungi.