A prevailing paradigm in forest ecology is that wood-boring beetles facilitate wood decay and carbon cycling, but empirical tests have yielded mixed results. We experimentally determined the effects of wood borers on fungal community assembly and wood decay within pine trunks in the southeastern United States. Pine trunks were made either beetle-accessible or inaccessible. Fungal communities were compared using culturing and high-throughput amplicon sequencing (HTAS) of DNA and RNA. Prior to beetle infestation, living pines had diverse fungal endophyte communities. Endophytes were displaced by beetle-associated fungi in beetle-accessible trees, whereas some endophytes persisted as saprotrophs in beetle-excluded trees. Beetles increased fungal diversity several fold. Over forty taxa of Ascomycota were significantly associated with beetles, but beetles were not consistently associated with any known wood-decaying fungi. Instead, increasing ambrosia beetle infestations caused reduced decay, consistent with previous in vitro experiments that showed beetle-associated fungi reduce decay rates by competing with decay fungi. No effect of bark-inhabiting beetles on decay was detected. Platypodines carried significantly more fungal taxa than scolytines. Molecular results were validated by synthetic and biological mock communities and were consistent across methodologies. RNA sequencing confirmed that beetle-associated fungi were biologically active in the wood. Metabarcode sequencing of the LSU/28S marker recovered important fungal symbionts that were missed by ITS2, though community-level effects were similar between markers. In contrast to the current paradigm, our results indicate ambrosia beetles introduce diverse fungal communities that do not extensively decay wood, but instead reduce decay rates by competing with wood decay fungi.