Interactions between plant-associated fungi and their hosts are characterized by a contin-uous crosstalk of chemical molecules. Specialized metabolites are often produced during these associations and play important roles in the symbiosis between the plant and the fungus, as well as in the establishment of additional interactions between the symbionts and other organisms present in the niche. Serendipita indica, a root endophytic fungus from the phylum Basidiomycota, is able to colonize a wide range of plant species, conferring many benefits to its hosts. The genome of S. indica possesses only few genes predicted to be involved in specialized metabolite biosynthesis, including a putative terpenoid synthase gene (SiTPS). In our experimental setup, SiTPS expression was up-regulated when the fungus colonized tomato roots compared to its expression in fungal biomass growing on synthetic medium. Heterologous expression of SiTPS in Escherichia coli showed that the produced protein catalyzes the synthesis of a few sesquiterpenoids, with the alcohol viridiflorol being the main product. To investigate the role of SiTPS in the plant-endophyte interaction, an SiTPS-over-expressing mutant line was created and assessed for its ability to colonize tomato roots. Although overexpression of SiTPS did not lead to improved fungal colonization ability, an in vitro growth-inhibition assay showed that viridiflorol has antifungal properties. Addition of viridiflorol to the culture medium inhibited the germination of spores from a phytopathogenic fungus, indicat-ing that SiTPS and its products could provide S. indica with a competitive advantage over other plant-associated fungi during root colonization.