This paper examines the emerging field of mycotecture, the application of fungal mycelium as a structural material, for the construction of extraterrestrial habitats, with particular emphasis on its feasibility for lunar environments. Grounded in the principles of in situ resource utilization (ISRU), mycotecture presents a lightweight, biodegradable, and resource-efficient alternative to conventional building materials, offering significant reductions in payload mass for long-duration space missions. This study assesses the architectural, ecological, and biotechnological potential of living fungal systems. Fungal species such as Ganoderma lucidum have demonstrated the capacity to form robust biocomposites when combined with lunar regolith simulants, while extremophilic organisms like Cryomyces antarcticus exhibit remarkable resistance to high radiation levels. Building on this potential, NASA’s Mycotecture Off Planet initiative has proposed a multi-layered habitat prototype incorporating ice for radiation shielding, cyanobacteria for oxygen generation, and a self-growing mycelial shell for structural support. These biologically integrated systems embody a regenerative design paradigm that converges architecture, synthetic biology, and sustainability. However, key technical challenges persist. The behavior of fungal growth under lunar gravity remains poorly understood; the long-term durability of mycelial materials in vacuum conditions has yet to be validated; and strict biocontainment measures are necessary to avoid forward contamination. Despite these limitations, mycotecture holds transformative potential for both space and Earth-based construction, offering a circular, carbon-negative approach to habitat design. By advancing this biologically driven architectural model, this study highlights mycotecture as a promising framework for regenerative, adaptive, and symbiotic living environments in extraterrestrial and terrestrial contexts alike.