Fungi are remarkable in their ability to undergo changes in their morphology, physiological state, or behaviour in response to external environmental changes. Mycelia of wood-decaying basidiomycetes are more efficient in terms of interspecific competition than single cell organisms due to their abilities to translocate resources via the mycelium. We have shown the white-rot fungus, Trametes versicolor has the ability to secrete extracellular droplets that contain long chain fatty acids as well as sugars. The composition of these differs under different growth conditions. In particular, the growth medium greatly influences this process with Malt extract agar found to be the only medium which consistently supported substantial extracellular secretions. Oil production could be further increased by physically modifying the growth environment. The difference in fatty acid composition between the secretory and non-secretory mycelium suggests that specific pathways are activated that cause secretion to occur in conjunction with the formation of some more unusual fatty acids. During the fungal oil secretion process, substance transport-related genes, including sugar transport genes, electron transport genes and ion transport gene expression were the most significantly effected. Further investigations are now required to determine why these secretions occur and the enzymes involved as these could prove important in developing a cost effective methodology for the production of polyunsaturated fatty acids beneficial to health. Further experiments involviong the cloning of various genes found to be upregulated during the RNA-seq analysis may facilitate understanding the regulation of the production of PUFAs. The consequence could be a means of regulating the specific production of PUFAs inside or outside the cell. In addition to PUFAs synthesis related genes, it is possible to try to edit non-fatty acids production related genes that could encourage the fungus to secret excess fatty acids from the body allowing 8 harvest of these fungal oil from the external media. This provides a novel approsch to the use of such fungi enabling future fungal oil production at an industrial scale.