The distribution of endophytes (fungal and bacterial) is ubiquitous and almost without exception; the endophytes have been reported from all tissues, including leaves, stems, roots, fl owers and fruits. As typical symptomless organisms, in contrast to their pathogenic counterparts, they pose a serious challenge in explaining their continued maintenance in plants. How do plants tolerate them? And how do the endophytes contain the plant defences? But a more intriguing and enigmatic issue with many endophytes is the fact that they mimic the production of specific plantassociated secondary metabolites (e.g. taxol, camptothecin and rohitukine) in culture, independent of the host tissue. Several theories including the possibility of horizontal gene transfer from the respective hosts have been proposed, but none has so far been supported. In this paper, we critically review studies on endophytes producing plant secondary metabolites and explore the possible molecular mechanisms. By analysing the pathway genes for a few major metabolites, including taxol and camptothecin, we show that a far more intricate molecular mechanism might be involved in the production of the secondary metabolites by the endophytes. We show that these molecular mechanisms could have arisen through the evolutionary interactions of the endophytes with their respective host plants. We discuss these findings in the context of the current interest in harnessing endophytes as alternative sources of plant secondary metabolites.