Straw utilization for composites is limited by poor resin and polymer penetration, and excessive resin consumption owing to the straw cuticle, fines, and lignin-hemicellulose matrix. White-rot fungi degrade these components of straw and could, therefore, potentially be used to improve resin penetration and resin binding without the use of physical or chemical pretreatments. Although long treatment times and large footprints the limit use of fungal treatments on a large scale, distributed fungal pretreatments could alleviate land requirements. In this article, we present progress toward the development of a passive fungal straw upgrading system utilizing white-rot fungi.