Different endophytic fungi isolated from Himalayan Yew plants were tested for their ability to produce taxol. The BAPT gene (C-13 phenylpropanoid side chain-CoA acetyl transferase) involved in the taxol biosynthetic pathway was used as a molecular marker to screen taxolproducing endophytic fungi. Taxol extracted from fungal strain TBPJ-B was identified by HPLC and MS analysis. Strain TBPJ-B was identified as Fusarium redolens based on the morphology and internal transcribed spacer region of nrDNA analysis. HPLC quantification of fungal taxol showed that F. redolens was capable of producing 66 μg/l of taxol in fermentation broth. The antitumour activity of the fungal taxol was tested by potato disc tumor induction assay using Agrobacterium tumefaciens as the tumor induction agent. The present study results showed that PCR amplification of genes involved in taxol biosynthesis is an efficient and reliable method for prescreening taxol-producing fungi. We are reporting for the first time the production of taxol by F. redolens from Taxus baccata L. subsp. wallichiana (Zucc.) Pilger. This study offers important information and a new source for the production of the important anticancer drug taxol by endophytic fungus fermentation.