Fungal endophytes and saprotrophs generally play an important ecological role within plant tissues and dead plant material. Several reports based solely on morphological observations have postulated that there is an intimate link between endophytes and saprotrophs. This study aims to provide valuable insight as to whether some endophytic fungi manifest themselves as saprotrophs upon host decay. Ribosomal DNA-based sequence comparison and phylogenetic relationships from 99 fungal isolates (endophytes, mycelia sterilia, and saprotrophs) recovered from leaves and twigs of Magnolia liliifera were investigated in this study. Molecular data suggest there are fungal taxa that possibly exist as endophytes and saprotrophs. Isolates of Colletotrichum, Fusarium, Guignardia, and Phomopsis, which are common plant endophytes, have high sequence similarity and are phylogenetically related to their saprotrophic counterparts. This provides evidence to suggest that some endophytic species change their ecological strategies and adopt a saprotrophic lifestyle. The implication of these findings on fungal biodiversity and host specificity is also discussed. © 2007 Springer Science+Business Media, Inc.