An endophytic fungus, PR4 was found in nature associated with the rhizome of Picrorhiza kurroa, a high altitude medicinal plant of Kashmir Himalayas. The fungus was found to inhibit the growth of several phyto-pathogens by virtue of its volatile organic compounds (VOCs). Molecular phylogeny, based on its ITS1-5.8S-ITS2 ribosomal gene sequence, revealed the identity of the fungus as Phomopsis/Diaporthe sp. This endophyte was found to produce a unique array of VOCs, particularly, menthol, phenylethyl alcohol, (+)-isomenthol, beta-phellandrene, beta-bisabolene, limonene, 3-pentanone and 1-pentanol. The purification of compounds from the culture broth of PR4 led to the isolation of 3-hydroxypropionic acid (3-HPA) as a major metabolite. This is the first report of a fungal culture producing a combination of biologically and industrially important metabolites-menthol, phenylethyl alcohol, and 3-HPA. The investigation into the monoterpene biosynthetic pathway of PR4 led to the partial characterization of isopiperitenone reductase (ipr) gene, which seems to be significantly distinct from the plant homologue. The biosynthesis of plant-like-metabolites, such as menthol, is of significant academic and industrial significance. This study indicates that PR4 is a potential candidate for upscaling of menthol, phenylethyl alcohol, and 3-HPA, as well as for understanding the menthol/monoterpene biosynthetic pathway in fungi.
