Plant growth-promoting fungi (PGPF) constitute diverse genera of nonpathogenic fungi that provide a variety of benefits to their host plants. PGPF show an effective role in sustainable agriculture. Meeting increasing demand for crop production without damage to the environment is the biggest challenge nowadays. The use of PGPF has been recognized as an environmentally friendly way of increasing crop production. These fungi have proven to increase crop yields by improving germination, seedling vigor, plant growth, root morphogenesis, photosynthesis, and flowering through either a direct or indirect mechanism. The mechanisms of PGPF involve solubilizing and mineralizing nutrients for easy uptake by plants, regulating hormonal balance, producing volatile organic compounds and microbial enzyme, suppressing plant pathogens and ameliorating abiotic stresses. Successful colonization is an intrinsic factor for most PGPF to exert their beneficial effects on plants. A certain level of specificity exists in the interactions between plant species and PGPF for root colonization and growth promoting effects. There is a gap between the number of reported efficacious PGPF and the number of PGPF as biofertilizer. Efforts should be strengthened to improve the efficacy and commercialization of PGPF. Hence, this chapter summarizes valuable information regarding the application and mechanisms of PGPF in sustainable agriculture.