Another mechanism of plant growth promotion by endophytes is bio­control of pathogens. Endophytes have evolved a diverse range of bio­control mechanisms including production of antibiotics, both antifungal and antibacterial, siderophore secretion, and enzyme production (reviewed by Compant et al. 2005b). Together, these bio-control properties enable endophytes to outcompete pathogens for their niche and limit damages caused by plant pathogens as well as protect their host plant, resulting in increased survival and growth.

Fungal endophytic colonization confers a positive impact on resistance to pests, mites, and nematodes in grasses (Schardl et al. 2004). Perennial ryegrass (L. perenne) plants colonized by N. lolii reduced aphid populations, adult life span and fecundity (Meister et al. 2006). Neotyphodium spp. form mutualistic associations with several grass genera and produce a range of bio-control agents, some of which have insecticidal properties whereas others are associated with health and welfare issues for grazing animals. Through selection, several novel endophytes that produce predominantly insecticidal bio-control agents have now been successfully commercialized in many temperate grassland areas in New Zealand, Australia, USA, and South America (Easton 2007).

One of the most commonly recognized bio-control mechanisms associated with endophytic plant growth promoting bacteria and fungi is the production of antibiotics. Agents produced include but are not limited to pyrrolnitrin, phenazines, herbicolin, and oomycin. Furthermore, many endophytic organisms are able to produce multiple agents, which have bio-cidal properties towards various organisms. Pyrrolnitrin, a secondary metabolite isolated from B. cepacia, was shown to have activities against both phytopathogenic fungi and bacteria (El-Banna and Winkelmann 1998). The gene cluster regulating the production of pyrrolnitrin is similar to the gene cluster in Pseudomonas and was suggested to have been acquired by horizontal gene transfer (de Souza and Raaijmakers 2003). Other strains of Burkholderia were reported to produce a large variety of anti-fungal agents such as occidiofungin and burkholdinesn (Lu et al. 2009; Tawfik et al. 2010). Burkholderia MP-1 produces at least four anti-fungal compounds including phenylacetic acid, hydrocinnamic acid, 4-hydroxyphenylacetic acid, and 4-hydroxyphenylacetate methyl ester (Mao et al. 2006). The small size of genes encoding antibacterial agents and the relatively small number of genes in bacteria and fungi may allow genes encoding antibiotic agents to be transformed to various growth promoting endophytes.