The main objective of this study was to obtain more comprehensive knowledge about the effect of water stress on endophytic fungal communities in asymptomatic and declining cork oak trees. Six asymptomatic and six declining cork oak trees were randomly selected in a natural cork oak forest located in Sardinia, Italy. In February 2003, the soil around three asymptomatic and three declining trees was covered with a circular plastic film to reduce rain water supply with the intention to induce water stress. The remaining six trees served as controls. Predawn xylematic water potential (PWP) was used as water status indicator and measured seasonally. Between July 2003 and June 2004, fungal endophytes were isolated every 2-4 months from twigs, branches and woody tissues. Significant differences in PWP between covered and control trees were detected mainly in autumn. Gas exchange was greatest in asymptomatic control plants. All tissues were colonized by endophytic fungi. Nineteen fungal species were isolated from 1620 plant fragments. Biscogniauxia mediterranea was the most frequently isolated fungus. Its isolation frequency was significantly higher in declining covered trees than in control trees (p < 0.05). Presence of this fungus in asymptomatic control trees was significantly higher in winter than in summer. Water stress seems to reduce species diversity of the endophytic mycobiota in cork oak and to promote proliferation of some potentially pathogenic endophytes.