Endophytes constitute a remarkably multifarious group of microorganisms ubiquitous in plants and maintain an imperceptible association with their hosts for at least a part of their life cycle. Their enormous biological diversity coupled with their capability to biosynthesize bioactive secondary metabolites has provided the impetus for a number of investigations on endophytes. There is a need to search new ecological niches for potential of natural bioactive agents for different pharmaceutical, agriculture and industrial application; these should be renewable, eco-friendly and easily obtainable natural products discovery in the search for new drugs and is the most potent source for the discovery of novel bioactive compounds. Therefore, a large number of bioactive compounds are isolated from the plants, bacteria, fungi and many other organisms. Endophytic fungi being the most promising of these have been a source of various such bioactive compounds. Many of these compounds are being used for the treatment of a number of diseases. The present review gives a detailed account about endophytic fungi and the bioactive compounds produced by them.