Mycelial culture is a compilation of techniques used to maintain or grow mycelium under sterile conditions on a medium of known composition. This method is frequently used in fungal biotechnology. This review article describes the methodology of biotechnological processes using cultures of higher fungi, e.g. initialization of mycelial cultures, types of media used in in vitro cultures of higher fungi, types of mycelial cultures, and culture conditions. In addition, this paper describes selected biologically active compounds produced by mycelium obtained in vitro. Furthermore, the research on mycelial cultures conducted at the Department of Pharmaceutical Botany at the Jagiellonian University Collegium Medicum in Krakow is presented from a historical perspective.