Alzheimer’s disease (AD) is a progressive, neurodegenerative disorder characterized by cognitive decline and behavioural disturbances. It has become a social and medical burden affecting the elderly globally and is expected to strike 106.8 million people by the year 2050. Management of AD involves use of drugs that are associated with many adverse effects. Therefore, the need arises for the development of relatively safer and therapeutically effective drugs. Mushrooms have been used as food as well as medicine in traditional systems of medicine since ancient times. Due to the vast array of constituents present in them, mushrooms constitute an important source for developing novel compounds. The present paper is a compilation of in-vitro, in-vivo and clinical studies on possible role of mushrooms for the management of AD. The review of available literature during the time period 1990 to 2014 using various databases such as Science Direct, Pubmed, Google Scholar and Scifinder revealed that the mushroom extracts and their constituents have shown pharmacological activities such as AChE inhibition, NGF synthesis, neurite outgrowth in PC 12 cells, improved learning and memory, improved cognition, decreased Aβ plaques, increased myelination, etc. which are relevant to the management of AD. Therefore, mushrooms can be developed as useful therapeutic agents in the management of AD.