24Endophytes are microbial colonizers that reside in plants by symbiotic association produces 25 several biological classes of natural products. The current study focuses on the isolation and 26 characterization of bioactive compounds produced by endophytic fungi isolated from the 27 Himalayan yew (Taxus wallichiana) collected from the Mustang district of Nepal. The plant 28 materials were collected from the Lower-Mustang region in the month of October 2016 and the 29 endophytic fungi were isolated on artificial media from inner tissues of bark and needles. 30 Antimicrobial and antioxidant activity, along with total phenolic-and flavonoid-content assays, 31 were used in the evaluation of bioactivity of the fermented crude extracts along with the in vitro 32 ability of the endophytes to produce the anticancer compound Taxol was analyzed. A total of 16 33 fungal morphotypes were obtained from asymptomatic inner tissues of the bark and needles of T. 34 wallichiana. Among the 16 isolates, the ethyl acetate (EA) fraction of isolate MUS1, showed 35 antibacterial and antifungal activity against all test-pathogens used, with significant inhibition 36 against Pseudomonas aeruginosa ATCC 27853 (MIC: 250 µg/ml) and the pathogenic yeast, 37 Candida albicans (MIC: 125 µg/ml). Antioxidant activity was also evaluated using 2,2-diphenyl-38 1-picrylhydrazyl (DPPH). At a concentration of 100 µg/ml, the % radical scavenging activity 39 was 83.15±0.40, 81.62±0.11, and 62.36±0.29, for ascorbic acid, butylated hydroxytoluene (BHT) 40 and the EA fraction of MUS1, respectively. The DPPH-IC50 value for the EA fraction was 81.52 41 µg/ml, compared to BHT (62.87 µg/ml) and ascorbic acid (56.15 µg/ml). The total phenolic and 42 flavonoid content in the EA fraction were 16.90±0.075 µg gallic acid equivalent (GAE) and 43 11.59±0.148 µg rutin equivalent (RE), per mg of dry crude extract, respectively. Isolate MUS1, 44 identified as an Annulohypoxylon sp. by ITS sequencing, also produced Taxol (282.05 µg/L) as 45 shown by TLC and HPLC analysis. Having the ability to produce antimicrobial and antioxidant 46 3 compounds, as well as the anticancer compound Taxol, makes Annulohypoxylon sp. strain 47 MUS1, a promising candidate for further study given that naturally occurring bioactive 48 compounds are of great interest to the pharmacological, food and cosmetic industries.49