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Five fungal endophytes (K4, K5, K6, K9, K14) producing Cajaninstilbene acid (CSA, 3-hydroxy-4-prenyl-5-methoxystilbene-2-carboxylic acid) were isolated from the roots of pigeon pea [Cajanus cajan (L.) Millsp.]. CSA is responsible for the prominent pharmacological activities in pigeon pea. The amount of CSA in culture solution varied among the five fungal endophytes. K4 produced the highest levels of CSA (1037.13 µg/L) among the endophytes tested after incubation for five days. Both morphological characteristics and molecular methods were used for species identification of fungal endophytes. The five endophytic isolates were characterized by analyzing the internal transcribed spacer (ITS) rRNA and β-tubulin genes. The K4, K5, K9 and K14 strains isolated from pigeon pea roots were found to be closely related to the species Fusarium oxysporum. K6 was identified as Neonectria macrodidym. The present study is the first report on the isolation and identification of fungal endophytes producing CSA in pigeon pea. The study also provides a scientific base for large scale production of CSA.