Taxol is the most effective antitumor agent developed in the past three decades. It has been used for effective treatment of a variety of cancers. A taxol-producing endophytic fungus Pestalotiopsis pauciseta (strain CHP-11) was isolated from the leaves of Cardiospermum helicacabum and screened for taxol production. The fungus was identified based on the morphology of the fungal culture and the characteristics of the spores and screened for taxol production. The amount of taxol produced by this endophytic fungus was quantified by HPLC and it produced 113.3 mg/L, thus the fungus can serve as a potential material for fungus engineering to improve taxol production. This fungal taxol also had strong anticancer activity against some cancer cells viz., BT 220, H116, Int 407, HL 251 and HLK 210 tested by Apoptotic assay and it is indicated that with the increase of taxol concentration from 0.005–0.05 mmol/L, taxol induced increased cell death through apoptosis.