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Endophytic microorganisms reside within plant tissues and have often been found to promote plant growth. In this study, endophytic microorganisms were isolated from the roots, stems, leaves, and seeds of healthy drunken horse grass, Achnatherum inebrians (Hance) Keng (Poales: Poaceae), through the use of a grinding separation method and identified by a dual approach of morphological and physiological observation and 16S rRNA gene-based (for bacteria) and internal transcribed sequence-based (for fungi) molecular identification. The endophytes were then inoculated into liquid media for fermentation, and their crude extracts were employed for insecticidal activity tests using slide disc immersion and nebulization methods. A total of 89 bacteria species, which were classified into eight genera, Bacillus, Pseudomonas, Actinomyces, Corynebacterium, Acinetobacter, Sphingomonas, Paenibacillus, and Phyllobacterium, and two fungi, Claviceps and Chaetomium, were isolated. Of these species, isolates Streptomyces albus (Rossi-Doria) Waksman and Henrici (Actinomycetales: Streptomycetaceae) (GA) and Claviceps purpurea (Fr.) Tul. (Hypocreales: Clavicipitaceae) (PF-2) were shown to produce mortality rates of more than 90% in the cotton aphid, Aphis gossypii Glover (Hemiptera: Aphididae), after first and second screenings. The isolates PF-2 and GA associated with A. inebrians had significant insecticidal activities towards A. gossypii Glover (Hemiptera: Aphididae) and may provide a new biological resource for exploring a new microbial insecticide.