Grasses have evolved various structural and physiological means of adapting to stress conditions, to ensure population stability in natural environments. Agricultural scientists have exploited such traits, in breeding for improved seed yield of annual cereal crops and for improved forage and turf characteristics of perennial grasses. It has been recently discovered that the endophytic fungus, Acremonium coenophialum Morgan-Jones & Gams, enhances the drought tolerance, competitiveness, and broad-range pest resistance of its host, tall fescue (Festuca arundinacea Schreb.). Acremonium lolii Latch, Christensen & Samuels also imparts insect resistance to perennial ryegrass (Lolium perenne L.). Such mutualistic symbioses may provide a means of supplementing conventional plant breeding, to further improve abiotic and biotic stress resistances in grasses. Even though endophytic fungi are widely distributed in the Poaceae, 61 shortterm progress in exploiting endophytes is most likely with species of Acremonium Link ex Fr. in Festuca L. and Lolium L. grasses, inasmuch as the agronomic benefits of these mutualisms are well described.