Ubiquitous endophytic fungi, residing asymptomatically within plant tissues, harbor immense potential as biocontrol agents against diverse phytopathogens. This biodiversity exhibits multiple antifungal mechanisms, including direct inhibition through the production of lipopeptides, antibiotics, and lytic enzymes. Endophytes prevent colonization and establishment by competitively depriving pathogens of essential nutrients and space. Furthermore, they engage in active parasitism, directly consuming pathogen cells, and utilize siderophore production to sequester iron crucial for pathogen growth. Notably, endophytes trigger induced systemic resistance within the host plant, enabling broader protection against pathogens. This review comprehensively explores the potential of endophytic fungi as biocontrol agents, delving into their biology, isolation, identification, and antifungal activity. It highlights the secondary metabolites that are produced by endophytic fungi and their defensive responses against phytopathogens. Additionally, the review briefly discusses techniques employed to study these microbial interactions within host plants. By unraveling the intricacies of these mechanisms, researchers pave the way for optimizing endophytic fungi as eco-friendly and sustainable alternatives to traditional chemical fungicides, ultimately promoting sustainable plant disease management.