Taxol is the most important member of the clinically useful natural anticancer drug. An endophytic fungus Chaetomella raphigera (strain TAC-15) was isolated from a medicinal plant Terminalia arjuna and screened for its potential in Taxol production. The fungus was identified based on the morphology of the fungal culture and the characteristics of the spores. This fungus was grown in MID liquid medium and analyzed by chromatographically and spectrometrically for the presence of Taxol. The amount of Taxol produced by this endophytic fungus was quantified by HPLC which showed that it produced 79.6 mu g/L, and further confirmative analyses were done by using UV, IR, FAB mass spectroscopy, and NMR spectroscopy. Thus, the fungus can serve as a potential material for fungus engineering to improve the production of Taxol.