Previous studies for enumerating fungal communities on pine needles relied entirely on phenotypic diversity (microscopy) or identification based on DNA sequence data from those taxa recovered via cultural studies. To bypass limitations of the culturing methods and provide a more realistic diversity estimate, we employed and assessed a PCR-DGGE based method coupled with rDNA phylogenetic sequence analyses to characterize fungal taxa associated with pine needles. Fresh (living) and decayed needles from three hosts of the Pinaceae (Keteleeria fortunei, Pinus elliottii and P. massoniana) were examined. Morphological studies reveal that the most abundant species associated with decayed needles were Cladosporium cladosporioides and an unidentified Trichoderma species followed by Gliocephalotrichum sp., Gliocladium sp., Lophodermium pinastri, Paecilomyces varioti, Phaeostalagmus cyclosporus and a Phoma sp, which are commonly occurring fungi. Community genomic data from freshly collected and decayed pine needles recovered 40 operational taxonomic units, which appear to be mostly undetected members of the natural fungal consortium. Sequence analyses revealed a number of phylotypes or “species” that were not recovered using traditional morphological and cultural approaches previously used. Phylogenetic data from partial 18S rDNA sequence data reveal that most phylotypes represent potential novel phylogenetic fungal lineages with affinities to the Dothideomycetes, Leotiomycetes, Lecanoromycetes and Sordariomycetes and were not identical to previously known endophytes or saprobes. Although the major ecological roles of these phylotypes in pine needles are still enigmatic, this study provides new insights in hidden fungal diversity that mycologists are possibly ignoring given the discrepancies associated with available methods. To what extent do previously recovered identified species (either as saprobes or endophytes) from morphological or culturing studies act as pioneer decomposers or constitute an integral part of endophytic community warrants further investigation.