The world has a continuing demand and utility for liquid fuels to power its societies. The utilization of crude oil based fuels is leading to a dramatic increase in the CO2 content of the atmosphere which is being related to a dangerously warming earth. Having liquid fuels that are derived from biological sources is one solution to this growing problem since the carbon being utilized is only from recycled sources. Presently, the microbes, having the greatest impact on the world's economies, producing liquid fuel are various yeasts producing ethanol. Other microbial sources need to be sought since ethanol is not the most desirable fuel and yeasts require simple sugars to carry out the fermentation processes. Recently, several endophytic fungi have been described that make hydrocarbons with fuel potential (Mycodiesel). Among others the compounds found in the volatile phases of these cultures include alkanes, branched alkanes, cyclohexanes, cyclopentanes, and alkyl alcohols/ketones, benzenes and polyaromatic hydrocarbons. Most importantly, generally these organisms make hydrocarbons while utilizing complex carbohydrates found in all plant-based agricultural wastes. Also discussed in this review is a rationale for finding hydrocarbon producing endophytes as well as examples of other promising hydrocarbon producers-Nodulisporium spp. which make 1,8-cineole and families of other hydrocarbons. Extremely favorable results of engine and fuel testing experiments recently completed on cineole and other products of Nodulisporium sp. are also presented. Finally, there is a brief discussion on the main limiting steps in the domestication of these fungi.