<p>Diseases caused by pathogenic microorganisms (bacteria, fungi, and viruses) have resulted in the quality and yield of crops, which has seriously affected the development of the agricultural economy. The prolonged use of chemical fungicides for prevention and control can lead to environmental pollution, hindering the sustainable development of safe and eco-friendly agriculture while also promoting the resistance of pathogenic microorganisms. Nevertheless, non–pathogenic endophytic fungi that form symbiotic relationships with plants still exhibit significant antagonistic effects on pathogenic microorganisms, even in small concentrations. These fungi pose no threat to human health and are highly beneficial to the ecological environment, making them an ideal alternative to chemical fungicides. They are increasingly being recognized and have been subjected to comprehensive research. Based on this, this article summarizes the types of endophytic fungi with biocontrol effects in recent years. It focuses on elucidating the mechanisms of their biocontrol from physiological and molecular perspectives. In addition, the application and development challenges of biocontrol agents (BCAs) derived from these fungi are also discussed, including difficulties in elucidating their mechanisms of action during research and development, challenges in strain selection and improvement, difficulties in controlling environmental adaptability, and stringent storage conditions. The aim is to develop more effective endophytic fungi as emerging biocontrol resources for agricultural production.</p>