Fungi play a crucial role in nutrient cycling by breaking down complex organic matter such as dead plants and animals. This process, known as decomposition, releases essential nutrients like nitrogen, phosphorus, and carbon back into the soil, making them available for other organisms to use. Additionally, fungi form symbiotic relationships with plants, such as mycorrhizae, which enhance the plant's ability to absorb nutrients from the soil. Overall, fungi are important decomposers and nutrient recyclers in ecosystems.