The mitigation mechanism of endophytic fungus EF0801 on rice seedlings under PEG stress was examined in the present study. Rice seedlings were divided into endophyte infection (E+) group and non-infection (E-) group under 0, 5, 10, 15 and 20% PEG stress for 6 days. The results showed that plant height, aboveground dry weight, the activities of ascorbate peroxidase (APX) and glutathione reductase (GR), and the contents of ascorbic acid (ASC), total ascorbic acid (TASC), glutathione (GSH) and total glutathione (TGSH) of E- group decreased significantly, while root length and underground dry weight first increased and then decreased, but electrical conductivity (EC) and malondialdehyde (MDA) contents and superoxide anion (O₂^–) contents increased with the increasing PEG concentrations. However, compared to E- group, the increases in the activities of GR, and APX, and the contents of Pro, TASC, TGSH and GSH result in the decreases in the contents of hydrogen peroxide (H₂O₂), O₂^– and MDA, and the increases in plant height and aboveground dry weight in E+ group. These results suggested that endophytic infection promoted ascorbic acid-glutathione cycle, thereby inhibiting oxidative stress to a certain extent, and subsequently improving the resistance of rice seedlings to PEG stress.