Hericium erinaceus, an edible and medicinal mushroom, has been utilized since ancient China due to its delicious taste and health benefits. The polysaccharide from H. erinaceus (HEP) is supposed to be one of the major bioactive compounds, which garnered widespread attention in seeking innovative applications for precision nutrition. Both in vitro and in vivo studies have shown that HEP possesses antioxidant and anti-aging, gastrointestinal protecting, anti-tumor, hypolipidemic and hypoglycemic, immune-enhancing, neuroprotective, and hepatoprotective activities, verifying its functional benefits to human health. This review provides an overview of the extraction and structure of HEP, and concluded that HEP had different structures with different sources of H. erinaceus and extraction methods. Besides, the biochemical and pharmacological properties of HEP as well as the relative mechanism were highlighted and summarized on the basis of in vivo and in vitro studies, which could be helpful for the healthy application of HEP. Finally, the research prospects of HEP for specific populations or precision nutrition were proposed.