Pleurotus eryngii (also known as king trumpet mushroom or king oyster mushroom) is an edible mushroom cultivated widely in many regions of the world. Polysaccharides from P. eryngii have a variety of biological activities, including anti-oxidant, anti-hyperlipidemic, anti-tumor, immunoregulatory and bacteriostatic. This paper reviews the extraction/purification, structural analysis and pharmacological activities of polysaccharides from this mushroom and provides updated research progress in areas important for the processing and product development of P. eryngii derived agents.