Thermophilic fungi are a small assemblage in mycota that have a minimum temperature of growth at or above 20°C and a maximum temperature of growth extending up to 60 to 62°C. As the only representatives of eukaryotic organisms that can grow at temperatures above 45°C, the thermophilic fungi are valuable experimental systems for investigations of mechanisms that allow growth at moderately high temperature yet limit their growth beyond 60 to 62°C. Although widespread in terrestrial habitats, they have remained underexplored compared to thermophilic species of eubacteria and archaea. However, thermophilic fungi are potential sources of enzymes with scientific and commercial interests. This review, for the first time, compiles information on the physiology and enzymes of thermophilic fungi. Thermophilic fungi can be grown in minimal media with metabolic rates and growth yields comparable to those of mesophilic fungi. Studies of their growth kinetics, respiration, mixed-substrate utilization, nutrient uptake, and protein breakdown rate have provided some basic information not only on thermophilic fungi but also on filamentous fungi in general. Some species have the ability to grow at ambient temperatures if cultures are initiated with germinated spores or mycelial inoculum or if a nutritionally rich medium is used. Thermophilic fungi have a powerful ability to degrade polysaccharide constituents of biomass. The properties of their enzymes show differences not only among species but also among strains of the same species. Their extracellular enzymes display temperature optima for activity that are close to or above the optimum temperature for the growth of organism and, in general, are more heat stable than those of the mesophilic fungi. Some extracellular enzymes from thermophilic fungi are being produced commercially, and a few others have commercial prospects. Genes of thermophilic fungi encoding lipase, protease, xylanase, and cellulase have been cloned and overexpressed in heterologous fungi, and pure crystalline proteins have been obtained for elucidation of the mechanisms of their intrinsic thermostability and catalysis. By contrast, the thermal stability of the few intracellular enzymes that have been purified is comparable to or, in some cases, lower than that of enzymes from the mesophilic fungi. Although rigorous data are lacking, it appears that eukaryotic thermophily involves several mechanisms of stabilization of enzymes or optimization of their activity, with different mechanisms operating for different enzymes.