Lichen is a symbiotic association of algae and fungi, recognized as a self-sustaining ecosystem that constitutes an indeterminant number of bacteria, actinomycetes, fungi, and protozoa. We evaluated the endolichenic fungal assemblage given the dearth of knowledge on endolichenic fungi (ELFs), particularly from part of the Central Western Ghats, Karnataka, and conducted a phylogenetic analysis of xylariaceous fungi, the most diversified group of fungi using ITS and ITS+Tub2 gene set. Out of 17 lichen thalli collected from 5 ecoregions, 42 morphospecies recovered, belong to the class Sordariomycetes, Eurotiomycetes, Dothideomycetes, Leotiomycetes, Saccharomycetes. About 19 and 13 ELF genera have been reported from Parmotrema and Heterodermia thallus. Among the ecoregions EC2 showing highest species diversity (Parmotrema (1-D) = 0.9382, (H) = 2.865, Fisher-α = 8.429, Heterodermia (1-D) = 0.8038, H = 1.894, F-α = 4.57) followed the EC3 and EC1. Xylariales are the predominant colonizer reported from at least one thallus from four ecoregions. The morphotypes ELFX04, ELFX05, ELFX08 and ELFX13 show the highest BLAST similarity (> 99%) with Xylaria psidii, X. feejeensis, X. berteri and Hypoxylon fragiforme respectively. Species delimitation and phylogenetic position reveal the closest relation of Xylariaceous ELFs with plant endophytes. The observation highlights that the deciduous forest harness a high number of endolichenic fungi, a dominant portion of these fungi are non-sporulating and still exist as cryptic. Overall, 8 ELF species recognized based on phylogenetic analysis, including the two newly reported fungi ELFX03 and ELFX06 which are suspected to be new species based on the present evidence. The study proved, that the lichen being rich source to establish fungal diversity and finding new species. Successful amplification of most phylogenetic markers like RPB2, building of comprehensive taxonomic databases and application of multi-omics data are further needed to understand the complex nature of lichen-fungal symbiosis.