Fungal pretreatment of switchgrass using Phanerochaete chrysosporium (PC), Trametes versicolor 52J (TV52J), and the Trametes versicolor mutant strain (m4D) under solid-state fermentation was conducted to improve its pellet quality. For all three fungal strains, the fermentation temperature had a significant effect (p < 0.05) on pellet unit density and tensile strength. The p-values of the quadratic models for all the response variables showed highly significant regression models (p < 0.01) except for dimensional stability. In addition, 3.1-fold and 2.8-fold increase in pellet tensile strength were obtained from P. chrysosporium- and T. versicolor 52J-treated materials, respectively. Microstructural examination showed that fungal pretreatment reduced pores in the pellets and enhanced pellet particle bonding. Among the fungal strains, PC had the shortest optimum fermentation time (21 d) and most positive impact on the pellet tensile strength and hydrophobicity. Therefore, switchgrass pretreatment using PC has the potential for resolving the challenges of switchgrass pellet transportation and storage and reducing the overall pelletization cost. However, a detailed comparative technoeconomic analysis would be required to make definitive cost comparisons.