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Endophytic fungi have several well-established beneficial effects on plant health and growth, and are a huge source of bioactive compounds. The endophyte Drechslera sp. strain 678, isolated from the roots of an Australian native grass Neurachne alopecuroidea , demonstrated efficacy against four plant pathogens ( Pythium ultimum , Rhizoctonia solani , Botrytis cinerea , Alternaria alternata ). In addition, strain 678 was capable of degrading a common additive used in gasoline, known as methyl tertiary-butyl ether (MtBE). Thus, the organic extracts obtained from the culture filtrate of strain 678 were studied. Metabolomic analysis revealed the presence of two major bioactive metabolites, monocerin and an alkynyl substituted epoxycyclohexenone derivative, which showed good antifungal activity. The Drechslera sp. strain 678 and its compounds show promise for applications in biocontrol and bioremediation activities in agriculture or as a remediation option for MtBE contamination in soil.