The Cordyceps mushrooms have a long history as medicinal fungi. In Traditional Chinese Medicine, Cordyceps have been used to treat several conditions including cancers for thousand of years. Extracts from both mycelium and fruiting bodies of C. sinensis, C. militaris and other Cordyceps species showed significant anticancer activities by various mechanisms such as, modulating immune system and inducing cell apoptosis. Some polysaccharide components and cordycepin (3' -deoxyadenosine) have been isolated from C. sinensis and C. militaris, which acted as potent anticancer components. This review article aims to further elucidate the importance of Cordyceps mushrooms by summarizing the findings of some of the important research works concerning possible mechanism of anticancer activity of this mushroom.