Endophytic fungi are important organisms that live and thrive in the intercellular or intracellular regions of host tissues of plants without causing immediate or adverse effects on the host plant. Endophytes constitute a large diversity of microbial adaptations that have been developed to survive adverse environments. Plant endophytic fungi play an important role to enhance the uptake and transfer of nutrients from the soil to plants simultaneously influencing the physical and chemical properties of soil. The discovery of fungal endophytes in their natural habitat is quite difficult due to few of its non-sporulating and non-culture-dependent endophytes by the traditional methods. The molecular characterization of isolated fungal endophytes can be carried out by isolation of genomic deoxyribonucleic acid (DNA), polymerase chain reaction (PCR) amplification of internal transcribed spacer (ITS) regions, DNA sequencing and analysis. One of the culture-independent approaches known as ‟metagenomics” is capable of reading the variety of ambient microbes that do not include cultivation from the environmental sample. Several researches on fungal endophytes in plants are in progress and have been under exploitation. Several secondary metabolites with diverse biological activities have been discovered in these fungi, suggesting that they have the ability to create a vast selection of secondary metabolites. In the hunt for new medications such as bioactive properties or innovative drug-like compounds, their variety and specialized habituation make them an attractive subject of research. The review highlights the biology of fungal endophytes, their discovery, isolation and identification by molecular methods.