Bioprospecting of endophytes offers significant promise in the discovery of plant-associated secondary metabolites (SMs) and their analogs or novel lead compounds for synthetic modifications towards therapeutic applications. The major hindrance in the large scale biosynthesis of SMs usually encoded by gene modules or operons is that regulation mechanisms involved at the molecular level still needs to be understood fully. We focus our review on the principal underlying molecular mechanisms involved in the initiation and regulation of plant SM biosynthesis in fungi and in particular fungal endophytes.