The development of Engineered Living Materials (ELMs) using fungal cells represents a transformative shift in materials science. This innovative research focuses on mycelium, the vegetative network of filamentous fungi, to create advanced functional materials. Mycelium exhibits unique characteristics such as self-assembly, environmental responsiveness, and self-healing, which are essential for developing fungal-based ELMs. This study presents a new method for synthesizing pure mycelium materials, showcasing their potential as sustainable alternatives to traditional leather. The primary objective is to understand the biological mechanisms and key factors that drive the regeneration process in fungal ELMs. A major discovery in this research is the identification of chlamydospores—robust, thick-walled cells formed at the end of hyphae—as critical to the self-repair mechanisms in these materials. The second objective assesses the viability of mycelium as a functional material, particularly after production. Results show that these mycelium-based materials are highly resilient, capable of withstanding extreme conditions such as desiccation and nutrient scarcity, and can repair themselves within 48 hours. The study also aims to quantitatively measure the self-healing efficiency of these materials. This includes a thorough analysis of the time needed for healing and a detailed evaluation of the mechanical and physical properties before and after damage and healing. The research aims to determine the extent to which these materials can restore their original structural integrity and functionality after damage and the timeframe required for such recovery.