The aim of this study was to evaluate the partial substitution of urea-formaldehyde (UF) adhesive by fungal biomass (FB) and soy flour (SF) for plywood (PW) fabrication. For this purpose, three substitute rates of 5%, 10%, and 15% based on the dry weight of UF were examined. The physical properties, functional groups, and thermo-stability of the adhesives were characterized as well as three-ply PW panels bonded with the adhesives were evaluated in terms of water absorption (WA), thickness swelling (TS), dry and wet shear strength, and formaldehyde emission (FE). The results show that FB and SF lead in higher viscosity and longer gel time than UF adhesive. The UF and UF modified with FB and SF showed similar Fourier-transform infrared spectroscopy (FT-IR) spectral patterns. In addition, fully cured FB-containing UF adhesive possessed higher thermal stability compared to UF and UF + SF adhesives. The results revealed that the partial replacement of UF adhesive with FB and SF has no significant negative effect on the dimensional stability of PW panels. The partial replacement of UF adhesive with FB and SF, particularly in substitute rate of 10% and 15%, did significantly reduce the FE while not significantly influencing the shear strength under both dry and wet conditions. Eventually, the FB-containing UF adhesive presented similar good performance and lower FE compared with UF and UF + SF adhesives. Hence, FB can be a promising natural raw material to use in wood adhesives with acceptable performance. © 2020, © 2020 Informa UK Limited, trading as Taylor & Francis Group.