Artemisia judaica is recognized for its medicinal properties, yet its associated fungal community, particularly endophytes, remains inadequately studied. This study investigates rhizosphere, rhizoplane, and endophytic fungi from A. judaica roots to identify fungal diversity and explore their bioactive compound. Forty root samples were analyzed using various media, revealing differences in colony-forming units (CFUs) among the fungal groups. Aspergillus and Penicillium dominated the rhizosphere and rhizoplane, while endophytes showed lower yields, with Aspergillus fumigatiaffinis and Aspergillus fischeri reported for the first time as A. judaica endophytes. A significant finding enhances comprehension of fungal-host interactions medicinal plants. Crude extracts of endophytic fungi exhibited strong antimicrobial activity against Gram-negative and Gram-positive, with notable antifungal effectiveness against Fusarium solani. ANOVA revealed significant differences in mean clear zones across bacterial and fungal groups (p < 0.0001, R² > 95%). Tukey's post-hoc analysis identified E. coli, B. cereus, and Fusarium solani as most susceptible, while B. subtilis, P. aeruginosa, and Candida albicans were least affected. Gas chromatography/mass spectrometry of A. fumigatiaffinis extracts identified 28 bioactive compounds, including 14 with high peak areas, demonstrating antimicrobial, cytotoxic, anti-inflammatory, and antioxidant properties.These compounds align with those naturally found in A. judicata, revealing an allelopathy relationship and suggesting the fungi's unique ability to synthesize secondary metabolites identical to those in the host plant. This study underscores the fungal diversity in A. judaica roots and highlights Aspergillus fumigatiaffinis as a promising source of bioactive compounds for pharmacological applications, offering new insights into the potential of endophytic fungi in drug discovery.