We review the phylogeny and ecology of the Kingdom Fungi, with particular emphasis on their diversity, distribution, and roles in soil. The fungi fall within the Opisthokonta and are divided into 14 lineages above the class level, including eight phyla. Relationships among the basal phyla remain uncertain, and new major branches are still being discovered. Geographically aligned, genetic breaks among myriad, cryptic species appear to be more common than truly cosmopolitan species. Fungi occur in nearly every habitat on Earth, including deep ocean sediments, salterns, permafrost, and the Dry Valleys of Antarctica, yet the greatest biomass is achieved in forest litter and organic soil horizons. Plant communities, soil horizon, and other edaphic factors are strongly correlated with fungal community composition, which is also structured by competition, predation, and mutualism. Strong (ligno) cellulose degrading capacities are best developed in the Dikarya, but are found in other phyla as well, while the gene families encoding these capabilities have undergone complex and dynamic evolution.