Fungi can be used for many of the same processes as bacteria. For industrial applications, yeasts combine the bacterial advantages of being a single-celled organism that is easy to manipulate and grow with the advanced protein modifications found in eukaryotes. They can be used to produce large complex molecules for use in food, pharmaceuticals, hormones, and steroids. Yeast is important for wine production and as of 2016 two genetically modified yeasts involved in the fermentation of wine have been commercialized in the United States and Canada. One has increased malolactic fermentation efficiency, while the other prevents the production of dangerous ethyl carbamate compounds during fermentation. There have also been advances in the production of biofuel from genetically modified fungi.
Fungi, being the most common pathogens of insects, make attractive biopesticides. Unlike bacteria and viruses they have the advantage of infecting the insects by contact alone, although they are out competed in efficiency by chemical pesticides. Genetic engineering can improve virulence, usually by adding more virulent proteins, increasing infection rate or enhancing spore persistence. Many of the disease carrying vectors are susceptible to entomopathogenic fungi. An attractive target for biological control are mosquitos, vectors for a range of deadly diseases, including malaria, yellow fever and dengue fever. Mosquitos can evolve quickly so it becomes a balancing act of killing them before the Plasmodium they carry becomes the infectious disease, but not so fast that they become resistant to the fungi. By genetically engineering fungi like Metarhizium anisopliae and Beauveria bassiana to delay the development of mosquito infectiousness the selection pressure to evolve resistance is reduced. Another strategy is to add proteins to the fungi that block transmission of malaria or remove the Plasmodium altogether.
Agaricus bisporus the common white button mushroom, has been gene edited to resist browning, giving it a longer shelf life. The process used CRISPR to knock out a gene that encodes polyphenol oxidase. As it didn't introduce any foreign DNA into the organism it was not deemed to be regulated under existing GMO frameworks and as such is the first CRISPR-edited organism to be approved for release. This has intensified debates as to whether gene-edited organisms should be considered genetically modified organisms and how they should be regulated.