Fungi play a crucial role in decomposition by breaking down complex organic matter, such as dead plants and animals, into simpler compounds. This process helps to recycle nutrients back into the ecosystem, making them available for other organisms to use for growth and development. Fungi also help to break down tough materials like lignin and cellulose, which are difficult for other decomposers to digest. Overall, fungi are essential for the decomposition process, playing a key role in the Earth's nutrient cycle.