Leather industry plays an important role in the economic development of the country and the wastewater from this industry is a major source of pollution among all industrial sectors considering both volume and composition of effluent. During leather processing, a number of size reduction, levelling and purification operations are carried out which results in generation of untanned and tanned proteinaceous waste materials which pose as a major environmental problem if not managed effectively. Large-scale production systems are adopted for leather processing and so this industry receives focus of environmentalists and society. Consequently, tremendous pressure is exerted by various pollution regulatory bodies to treat the effluents before disposal. The tannery effluents contain tannins, high suspended solids, and dissolved solids, BOD and some inorganic compounds such as chlorides, sulphides, sulphates, sodium and some toxic heavy metals, which affect the environment. Thus there is a need for innovative treatment technologies for the removal of these heavy metal ions from wastewater. Numerous physical and chemical methods such as screening, flow equalization, primary sedimentation, chemical flocculation, aerobic activated sludge treatment, secondary sedimentation have been employed for the disposal of wastes. These methods are very expensive and therefore the most reliable way seems to be the biological treatment using microorganisms that serve as efficient detoxifiers of pollutants. Fungi contribute a major role in the reduction of pollution by possessing superior aptitudes to produce a large variety of extracellular proteins, organic acids and other metabolites, and for their capacity to adapt to severe environmental constraints. Fungi are mainly used in leather production in different steps like soaking, dehairing, bating, dyeing, degreasing or in effluent and proteinaceous solid wastes treatment. During the bating process, fungi remove the degraded hairs and epidermis and promote the removal of non structural proteins and help on carbohydrates removal. Free mycelia, mycelia pellets, immobilized fungi or their enzymes have been reported in treatment of leather effluents. Thus the use of fungi to treat leather effluent is cost effective and therefore highly suitable for reduction of pollutant load of tannery effluents.