BackgroundSugarcane is one of the most important crops in Brazil, mainly because of its use in biofuel production. Recent studies have sought to determine the role of sugarcane endophytic microbial diversity in microorganism-plant interactions, and their biotechnological potential. Epicoccum nigrum is an important sugarcane endophytic fungus that has been associated with the biological control of phytopathogens, and the production of secondary metabolites. In spite of several studies carried out to define the better conditions to use E. nigrum in different crops, little is known about the establishment of an endophytic interaction, and its potential effects on plant physiology.Methodology/Principal FindingsWe report an approach based on inoculation followed by re-isolation, molecular monitoring, microscopic analysis, plant growth responses to fungal colonization, and antimicrobial activity tests to study the basic aspects of the E. nigrum endophytic interaction with sugarcane, and the effects of colonization on plant physiology. The results indicate that E. nigrum was capable of increasing the root system biomass and producing compounds that inhibit the in vitro growth of sugarcane pathogens Fusarium verticillioides, Colletotrichum falcatum, Ceratocystis paradoxa, and Xanthomomas albilineans. In addition, E. nigrum preferentially colonizes the sugarcane surface and, occasionally, the endophytic environment.Conclusions/SignificanceOur work demonstrates that E. nigrum has great potential for sugarcane crop application because it is capable of increasing the root system biomass and controlling pathogens. The study of the basic aspects of the interaction of E. nigrum with sugarcane demonstrated the facultative endophytism of E. nigrum and its preference for the phylloplane environment, which should be considered in future studies of biocontrol using this species. In addition, this work contributes to the knowledge of the interaction of this ubiquitous endophyte with the host plant, and also to a better use of microbial endophytes in agriculture.