ABSTRACTEpichloëtyphinaand fungi thought to be closely related to it are widespread as endophytes in the Poaceae. Based on biological features of the fungus-host relationship, associations may be classified as one of three types. In type 1 associations, stromata form on most of the plants harboring endophytes. This type of association has been found in several subfamilies of grasses and sedges. In type 2 associations, stromata are formed on very few of the numerous infected individuals, while in type 3 associations stromata have not been observed on infected plants. The latter two associations are known to occur only in the subfamily Festucoideae. It is evident that coevolution has occurred betweenEpichloespp. and festucoid grasses resulting in the evolution of mutualisms from primarily pathogenic relationships. It is suggested that this has occurred by selection of grass individuals which possessed the ability to suppress stromata formation by the endophytes. The mechanism for suppression of stromata may involve production of alkaloids which inhibit growth of these fungi.