Fungal endophytes are widespread and diverse plant symbionts living asymptomatically inside healthy plants. The interaction between endophytes and their host promotes the plant-growth and enhances tolerance to biotic and environmental stresses and habitat expansion. The present research examines if plants depend on their associated fungal communities for wide ecological amplitude or habitat expansion. We evaluated the endophytic fungal community of Solanum dulcamara plants collected from contrasting hydrological habitats. Endophytes’ abiotic stress tolerance ability was assessed to understand their ecological significance. The results show that environment and plant tissues (leaf, stem, and roots) shape the endophytic fungal composition. Further, criteria were proposed to select the potential endophytic fungal candidate for crop improvement. We used two study systems (Festuca rubra-Fusarium sp. and Chinese cabbage-Serendipita indica) to demonstrate the potential of fungal endophytes to improve fitness and stress tolerance. Plant growth under harsh conditions depends on its fungal community for habitat adaptation. The endophytic fungus, Fusarium sp., isolated from the salt-adapted environment, conferred salinity stress tolerance to salt-sensitive red fescue grass. This study validates the concept of habitat-adapted symbiosis. Furthermore, an experimental system was developed to understand the physiological mechanism of plant-endophytic fungus interaction using a positive study system, Chinese cabbage-Serendipita indica, under abiotic stress conditions (flooding and salinity). Endophyte inoculation improved flooding and salinity stress tolerance by modulating the eco-physiological parameters, root system architecture, and potassium ion retention compared to non-inoculated control plants. Finally, this research proposes that fungal endophytes can be used as next-generation biostimulants for crop improvement under suboptimal conditions.