Aims: Palm oil mill effluent (POME) is a major agricultural waste product of Malaysia. The aim of this study was to identify endophytic fungi capable of producing biofuel feedstock utilizing POME. Methodology and results: Endophytes were isolated from the Nipah palm tree, Nypa fruticans, and exposed to different POME concentrations (25%, 50% and 75%), with and without the addition of nutrients. The utilization of glucose was measured using the Dinitrosalicylic Acid assay whereas the lipid content in the fungal cells was extracted using the Bligh and Dyer method with slight modifications. Three endophytic fungi that displayed the highest growth on POME were identified using ITS 1 and 4 primers and found to be related to Pestalotiopsis sp., Lasiodiplodia theobromae and Rhizoctonia bataticola. Nutrient addition caused an average increase of 8 times in biomass, indicating nitrogen requirement for cell proliferation. The highest POME concentration (75%) resulted in lower biomass yield. Furthermore, all fungal samples in high POME concentration and nutrient conditions showed a decrease in lipids accumulated per milligram of biomass whereby lipid synthesis was enhanced under nitrogen limitation (25% without nutrients). Conclusion, significance and impact of study: In conclusion, all fungal samples can be classified as oleaginous microorganisms with Pestalotipsis sp. being the most efficient (up to 70% of its biomass). This is to our knowledge the first study that shows the potential use of Pestalotiopsis sp., L. theobromae and R. bataticola for the utilisation of POME as biofuel feedstock and could in the future potentially provide an alternative approach to the treatment of POME with value-added effect.