Soil is a complex biological system that contains diverse microorganisms interacting with one another and with organic matter and minerals. Fungi play an important role in maintaining the activity of this system by decomposing organic residues, contributing to humus formation, and improving soil structure and its physical and biological properties. Humus is a relatively complex organic material formed through the transformation of the remains of living organisms and the interaction of their decomposition products with soil components. Humus formation does not result from fungal activity alone; rather, it involves multiple interactions among fungi, bacteria, soil organisms, and chemical processes. Nevertheless, fungi contribute significantly to this process because of their ability to decompose many organic compounds introduced into the soil through plant residues and wood. Fungi begin contributing to humus formation by decomposing plant tissues and organic residues through the secretion of enzymes that break down compounds such as cellulose, hemicellulose, and lignin. These materials are gradually converted into simpler compounds. Some are used for fungal growth and biomass production, while other decomposition products participate in reactions that contribute to the formation and stabilization of soil organic matter. Fungal hyphae (Hyphae) play an important role in improving the physical structure of soil. They extend between soil particles, helping bind them together and form more stable soil aggregates. These aggregates influence soil porosity, aeration, and water movement. They may also help reduce certain forms of erosion and maintain favorable conditions for root growth. Another important aspect of fungal activity is its contribution to nutrient retention and recycling. As fungi decompose organic residues, nutrients such as nitrogen and phosphorus are released and may become available to plants and other organisms. The accumulation of stable organic matter can also improve the soil's capacity to retain water and certain nutrients, thereby supporting soil fertility and biological activity. The contribution of fungi varies according to fungal species and surrounding environmental conditions, including temperature, moisture, pH, the nature of organic matter, and oxygen availability. Interactions between fungi, bacteria, and other soil organisms also influence decomposition rates and the nature of the resulting products. The importance of fungi in agricultural systems is evident in their role in decomposing crop residues and plant waste and helping transform these materials into organic matter that can improve soil quality. Specific types of mycorrhizal fungi can also be used to support plant nutrient uptake, particularly phosphorus, depending on soil conditions, plant species, and the type of fungus. Maintaining soil biological activity requires an understanding of the interactions among decomposer organisms, organic matter, and the physical and chemical properties of soil. Fungi are an important component of these interactions because their activities contribute to the sustainability of soil fertility, support plant growth, and help maintain ecological balance. Al-Mustaqbal University – The First University in Iraq