Endophytic fungi are a diverse and important group of microorganisms. We investigated the occurrence of Colletotrichum species as endophytes in two common tropical grass species, Pennisetum purpureum (dwarf napier) and Cymbopogon citratus (lemon grass) in Thailand. Combined phylogenetic analysis of ITS, partial sequences of actin (ACT), calmodulin (CAL) and glyceraldehydes-3-phosphate dehydrogenase (GAPDH) gene regions and morphology were used to characterize the species. This is the first report of an association as endophytes of Colletotrichum fructicola, C. tropicale and C. siamense with Pennisetum purpureum, and C. fructicola and C. siamense with Cymbopogon citratus. Colletotrichum endophytica sp. nov. associated with Pennisetum purpureum, is introduced based on multi-locus phylogenetic analysis with descriptions and illustrations. The potential hyperdiversity of the endophytic Colletotrichum species associated with tropical grasses is discussed with an emphasis on future research.