From the Super Mario Wiki
Humans are a species that live on Mushroom World and on the far away planet of Earth. Humans are one of the many sapient species on the Mushroom World. While there are a number of humans on Mushroom World, they are not nearly as numerous as Toads, Goombas, Koopa Troopas, and many other species. However, humans are the dominant species of the Earth (and the only sapient species on the planet).
Humans are a remarkable and multi-talented species. They can be good jumpers (as indicated by Mario and Luigi), very strong (like Wario) and technologically innovative (like Professor E. Gadd). It is possible that Toads and humans can interbreed, as Princess Peach calls a Toad her grandmother; whether or not this is her biological grandmother or simply a term of endearment is unknown.
The inhabitants of Twilight Town refer to themselves as human despite their rather inhuman appearance. Additionally, the skeletons of what appear to be humans can be found shackled in chains in several of the sunken ships in the area Gloomy Galleon in the game Donkey Kong 64. Miis from various Wii games are also human.
In the beta version of Super Mario Sunshine, humans were originally going to appear in the game, but were removed for unknown reasons (although one human disguised as a Pianta, Il Piantissimo, is in the game).