Fungal endophytes are fungi that reside in tissues of healthy living plants offering chemical protection and promoting growth of host plants. The chemistry and biological properties of their secondary metabolites from monoaxenic cultures have been extensively studied, but co-culture techniques using endophytes remain largely unexplored. Co-culture of bacteria with endophytic fungi have shown to be effective, leading to the discovery of novel chemistry while simultaneously addressing the problem of rediscovery of known metabolites from the monoaxenic culture techniques. Forty microliters (40μL) of culture broth consisting of monoaxenic and co-cultures were placed in separate agar wells with 5μg ciprofloxacin as positive control. The co-culture broth from one unidentified endophytic fungus with B. subtilis showed a marked zone of inhibition measuring 24.7 ±0.6 mm in comparison to ≥21.0 mm as the sensitivity range for ciprofloxacin against Escherichia coli while its monoaxenic culture exhibited no inhibition, but furthermore showed moderate activity (16.7 ± 1.2 mm) against B. subtilis. The isolation and chemical characterization of the active component and the mechanism of B.subtilis induction is under investigation. It is hoped that this unique Papua New Guinea endophyte will provide broad-spectrum antibiotic to combat the growing global problem of drug resistant infections.