Fungal endophytes isolated from leaves of tree species of the forests of Western Ghats, southern India were screened for chitin modifying enzyme production. Thirtyone of the one hundred and sixty two isolates were positive for chitinase, while different isolates produced isoforms of the enzyme. Many isolates produced chitosanase that acted on chitosan with different degrees of acetylation. Modified chitin and different types of chitosans are used in biomedical applications including wound healing, drug delivery, gene delivery, tissue engineering, in the food industry as preservatives and emulsifying agents, and in biocatalysis. Horizontally transmitted endophytes appear to be a good source for a variety of chitin modifying enzymes with the potential to be used in biotechnology. The possibility of chitin modifying enzymes of endophytes in regulating plant defense against pathogens and pests in vivo should also be addressed.