~Coriolus versicolor is a medicinal mushroom widely prescribed for prophylaxis and treatment of cancer and infection in China. It has been extensively proved that the ingredients obtained from Coriolus versicolor display a wide array of biological activities, including stimulatory effects on different immune cells and inhibition of cancer growth. The growing popularity of water-extracted Coriolus versicolor as an adjunct medical modality to conventional cancer therapies has generated substantial commercial interest in developing these extracts into consistent and efficacious oral proprietary products. While very limited information is available on the physical, chemical, and pharmacodynamic properties of the active principles present in these extracts, there has been sufficient scientific evidence to support the feasibility of developing at least some of these constituents into an evidence-based immunodulatory agent. In this article, the background, traditional usage, pharmacological activities, clinical effects, adverse reactions, active constituents, and regulatory aspects of Coriolus versicolor are reviewed.