Biological pulping has the potential to improve the quality of pulp, properties of paper and to reduce energy costs and environmental impact relative to traditional pulping operations. It has been suggested that energy savings alone could make the process economically viable, Other benefits include improved burst strength and tear indices of the product and reduced pitch deposition during the production process. The technology has focused on the white rot fungi, which have complex extracellular ligninolytic enzyme systems that can selectively remove or alter lignin and allow cellulose fibers to be obtained. Although still far from completely understood, these enzyme systems are being characterized mechanistically and on a molecular level with primary emphasis on the enzymes lignin peroxidase, manganese peroxidase and laccase. Scale-up to industrial process requirements presents challenges that are difficult to simulate in laboratory or pilot-scale tests. Inoculation, aeration and heat dissipation are key parameters for maintaining fungal activity. It may be possible to monitor and maintain consistent treatments through a program of active wood chip pile management. Overcoming these challenges will determine, in large part, if biopulping becomes a reality.