Plant-associated microbes including dark septate endophytes (DSEs) of forest trees play diverse functional roles in host fitness including growth promotion and increased defence. However, little is known about the impact on the fungal transcriptome and metabolites during tripartite interaction involving plant host, endophyte and pathogen. To understand the transcriptional regulation of endophyte and pathogen during co-infection, Norway spruce (Picea abies) seedlings were infected with DSE Phialocephala sphaeroides, or conifer root-rot pathogen Heterobasidion parviporum, or both. Phialocephala sphaeroides showed low but stable transcripts abundance (a decrease of 40%) during interaction with Norway spruce and conifer pathogen. By contrast, H. parviporum transcripts were significantly reduced (92%) during co-infection. With RNA sequencing analysis, P. sphaeroides experienced a shift from cell growth to anti-stress and antagonistic responses, while it repressed the ability of H. parviporum to access carbohydrate nutrients by suppressing its carbohydrate/polysaccharide-degrading enzyme machinery. The pathogen on the other hand secreted cysteine peptidase to restrict free growth of P. sphaeroides. The expression of both DSE P. sphaeroides and pathogen H. parviporum genes encoding plant growth promotion products were equally detected in both dual and tripartite interaction systems. This was further supported by the presence of tryptophan-dependent indolic compound in liquid culture of P. sphaeroides. Norway spruce and Arabidopsis seedlings treated with P. sphaeroides culture filtrate exhibited auxin-like phenotypes, such as enhanced root hairs, and primary root elongation at low concentration but shortened primary root at high concentration. The results suggested that the presence of the endophyte had strong repressive or suppressive effect on H. parviporum transcripts encoding genes involved in nutrient acquisition.