Go into a Chinese apothecary and ask for Zhu Ling and they will bring out a container with thin slivers of dried medicinal mushrooms. Zhu Ling is sold as a diuretic and anti-tumor medicine. It is also used as an antibiotic, in particular for urinary tract infections. 
Zhu Ling grows under the ground on rotting wood. It stays fresh in wet soils for over a year, which proves that it has a powerful immune system loaded with chemical compounds to fight off microbes.
In accordance with the use of Zhu Ling in Traditional Chinese Medicine (TCM), a contemporary study concluded that it had an inhibitory effect on Chlamydia. 
A series of modern studies have found promising results in the use of Zhu Ling against parasites, treating Hepatitis B and boosting the immune system, [303, 304] as well as in the treatment of certain types of cancer, [305, 306, 307, 308] including leukemia, [310, 311], bladder and liver cancer.  It has been reported to be helpful in immune system recovery and preventing cancer recurrence after chemotherapy and radiation.  Two papers from 1991 and 1994 reported 68% and 50% reduction rates of cancer recurrence with the use of Zhu Ling after chemo and radiation. [313, 314]
Two parasites that have responded well to treatment with Zhu Ling extract are Plasmodium falciparum (malaria) and Brucella spp. (brucellosis). Lab exposure of the malaria parasite to Zhu Ling extract proved 100% effective.  We don't as of yet have any report from a study on live patients with malaria.
In the case of brucellosis, Zhu Ling extract helped reverse the suppression of the immune system, which is part of this debilitating disease. [315, 316]
Another use of Zhu Ling in Traditional Chinese Medicine is for the treatment of hepatitis B. Several studies have confirmed that Zhu Ling has an effect in the treatment of hepatitis B. [317, 318] However, Liu in 2001 concluded that the effect is not strong enough to be able to rely exclusively on Zhu Ling for the treatment of hepatitis B, although it can be used effectively in combination with other forms of treatment. [319, 320] Zhu Ling also demonstrates a protective effect in cases of toxic hepatitis. 
A novel use of Zhu Ling besides the traditional Chinese usage is as a powerful anti-inflammatory, as reported by a new study published in 2008. 
One modern study showed that Zhu Ling extract appears to balance urine production by increasing low urinary output and decreasing it if it's too high. 
A non-glamorous but pragmatic use of Zhu Ling Might therefore be to offer it to patients waiting to give a urine sample, to shorten the wait. 
Paul Stamets in his book Mycelium Running also lists viruses and lung conditions among the areas where Zhu Ling has demonstrated usefulness. 
Note: The statements on this page have not been evaluated by the Food and Drug Administration. This article is not intended to diagnose, treat, cure or prevent any disease. Never use any herb (or mushroom) except as advised by a licensed medical practitioner.
Credit to Paul Stamets for research and source material.