Indian sandalwood (Santalum album Linn.), an evergreen tree, indigenous to the Indian peninsula is known for its fragrant heartwood worldwide. Sandalwood plantations are gaining importance throughout the Indian subcontinent demanding large-scale production and the establishment of nurseries with Quality Planting Material (QPM). However, sandalwood seedlings succumb to devastating diseases at nurseries leading to high mortality of the planting stock. Therefore, there is a dire need for the effective management of these diseases. In our study, we isolated and identified phytopathogenic fungi such as Fusarium solani causing wilt disease with seedling mortality of 25 % and Colletotrichum siamense causing anthracnose disease with a disease incidence of 75 %.We identified and characterized a total of 90 fungal endophytic isolates from leaf, stem, and root tissues of disease escaped or apparently healthy seedlings of sandalwood. Total fungal endophytes isolated from the disease escaped sandalwood seedlings comprised 33.3 % Colletotrichum siamense, 26.6% Diaporthe melonis, 13.3% Aspergillus sclerotiorum, 13.3% Fusarium oxysporum, 13.3 Paraphoma radicina, 6.6% Alternaria alternata and 6.6% Pestalotiopsis microspora. Molecular identification using the nuclear ribosomal DNA internal transcribed spacer (ITS) sequences were performed and those species which could not be resolved with ITS sequence were subjected to multi-locus gene (beta-tubulin (TUB2), glyceraldehyde‐3‐phosphate dehydrogenase (GAPDH) gene, chitin synthase 1 gene (CHS‐1), actin gene (ACT) and glutamine synthetase (GS) genes) analysis and the sequences were deposited to GenBank. Dual culture test assay revealed that the fungal endophytes Aspergillus sclerotiorum and Diaporthe melonis showed the highest percent inhibition of 63.08% and 61.54%, respectively against Fusarium solani and Diaporthe melonis and Fusarium oxysporum showed highest percent inhibition of 55.38 % and 67.69 % in case of the pathogen Colletotrichum siamense. This study will be useful for the management of seed, soil and airborne pathogens of Indian sandalwood.