The antifungal activity of the methanolic extract of Mahonia napaulensis D.C. or Taming (local name) leaves was evaluated with four species of common pathogenic fungi e.g. Colletotrichum capsici (MTCC No. 2071), Leptosphaerulin trifoli (MTCC No. 2328), Alternaria brassicicola (MTCC No. 2102) and Helminthosporium solani (MTCC No. 2075). The present investigation also aims at developing an eco friendly natural antifungal finish from plant extract of Mahonia for textile application. The antifungal textile dyeing was also carried out with aqueous extract of stem and leaves of Mahonia and the dyed fabric was tested against fungal species Trichoderma for its antifungal activity in vitro. Mahonia extract showed substantial antifungal activity of 83.33 % for Leptosphaerulin trifoli and Alternaria brassicicola by 80 ppm dose in 24 hours and 46 % antifungal activity in Mahonia dyed pieces in broth against Trichoderma.