Fungi in coral reefs exist as endoliths, endobionts, saprotrophs and as pathogens. Although algal and fungal endoliths in corals were described way back in 1973, their role in microboring, carbonate alteration, discoloration, density banding, symbiotic or parasitic association was postulated almost 25 years later. Fungi, as pathogens in corals, have become a much discussed topic in the last 10 years. It is either due to the availability of better tools for investigations or greater awareness among the research communities. Fungi which are exclusive as endoliths (endemic) in corals or ubiquitous forms seem to play a role in coral reef system. Fungi associated with sponges and their role in production or induction of secondary metabolites in their host is of primary interest to various pharmaceutical industries and funding agencies. Fungal enzymes in degradation of coral mucus, and plant detritus hold great promise in biotechnological applications. Unravelling fungal diversity in corals and associated reef organisms using culture and culture-independent approaches is a subject gaining attention from research community world over.