Holo-omics provide a novel opportunity to study the interactions among fungi from different functional guilds in host plants in field conditions. We address the entangled responses of plant pathogenic and endophytic fungi associated with sorghum when droughted through the assembly of the most abundant fungal, endophyte genome from rhizospheric metagenomic sequences followed by a comparison of its metatranscriptome with the host plant metabolome and transcriptome. The rise in relative abundance of endophytic Acremonium persicinum (operational taxonomic unit 5 (OTU5)) in drought co-occurs with a rise in fungal membrane dynamics and plant metabolites, led by ethanolamine, a key phospholipid membrane component. The negative association between endophytic A. persicinum (OTU5) and plant pathogenic fungi co-occurs with a rise in expression of the endophyte's biosynthetic gene clusters coding for secondary compounds. Endophytic A. persicinum (OTU5) and plant pathogenic fungi are negatively associated under preflowering drought but not under postflowering drought, likely a consequence of variation in fungal fitness responses to changes in the availability of water and niche space caused by plant maturation over the growing season. Our findings suggest that the dynamic biotic interactions among host, beneficial and harmful microbiota in a changing environment can be disentangled by a blending of field observation, laboratory validation, holo-omics and ecological modelling.