The fungal family Clavicipitaceae includes plant symbionts and parasites that produce several psychoactive and bioprotective alkaloids. The family includes grass symbionts in the epichloae clade (Epichloë and Neotyphodium species), which are extraordinarily diverse both in their host interactions and in their alkaloid profiles. Epichloae produce alkaloids of four distinct classes, all of which deter insects, and some—including the infamous ergot alkaloids—have potent effects on mammals. The exceptional chemotypic diversity of the epichloae may relate to their broad range of host interactions, whereby some are pathogenic and contagious, others are mutualistic and vertically transmitted (seed-borne), and still others vary in pathogenic or mutualistic behavior. We profiled the alkaloids and sequenced the genomes of 10 epichloae, three ergot fungi (Claviceps species), a morning-glory symbiont (Periglandula ipomoeae), and a bamboo pathogen (Aciculosporium take), and compared the gene clusters for four classes of alkaloids. Results indicated a strong tendency for alkaloid loci to have conserved cores that specify the skeleton structures and peripheral genes that determine chemical variations that are known to affect their pharmacological specificities. Generally, gene locations in cluster peripheries positioned them near to transposon-derived, AT-rich repeat blocks, which were probably involved in gene losses, duplications, and neofunctionalizations. The alkaloid loci in the epichloae had unusual structures riddled with large, complex, and dynamic repeat blocks. This feature was not reflective of overall differences in repeat contents in the genomes, nor was it characteristic of most other specialized metabolism loci. The organization and dynamics of alkaloid loci and abundant repeat blocks in the epichloae suggested that these fungi are under selection for alkaloid diversification. We suggest that such selection is related to the variable life histories of the epichloae, their protective roles as symbionts, and their associations with the highly speciose and ecologically diverse cool-season grasses. The fungal family, Clavicipitaceae, includes “ergot” fungi that parasitize ears of cereals and have historically caused mass poisonings, as well as “epichloae,” which are symbionts of grasses. Many epichloae are mutualistic symbionts, but some are pathogenic, and others have both mutualistic and pathogenic characteristics. Most Clavicipitaceae produce “alkaloids,” small molecules that deter insects, livestock, and wildlife from feeding on the fungus or plant. Epichloae protect their hosts with diverse alkaloids belonging to four chemical classes. After sequencing the entire DNA contents (“genomes”) of ten epichloae, three ergot fungi, and two relatives, we compared their “clusters” of genes for alkaloid biosynthesis. In the epichloae, these clusters contained extraordinarily large blocks of highly repetitive DNA, which promote gene losses, mutations, and even the evolution of new genes. These repeat blocks account for the exceptionally high alkaloid diversity in the epichloae and may relate to the ecological diversity of these symbiotic fungi.

Various cool-season grasses are infected by Epichloë endophyte, and this symbiotic relationship is always of benefit to the host grass due to an increased resistance to abiotic and biotic stresses. Fungal diseases adversely affect the yield, quality, and economic benefits of rangelands, which affects the production of animal husbandry. Therefore, it is imperative to breed resistant cultivars and to better understand the role of fungal endophytes in order to protect grasses against pathogens. The present review introduces research regarding how these endophytes affect the growth of pathogens in vitro and how they change the resistance of host plants to plant diseases. From the perspective of physical defense, changes in physiological indexes, and secretion of chemical compounds, we summarize the potential mechanisms by which endophytes are able to enhance the disease resistance of a host grass. Through these, we aim to establish a solid theoretical foundation for plant disease control and disease resistance breeding by application of fungal endophytes. A broader understanding of fungal endophyte effects on hosts could create a new opportunity for managing or introducing fungal symbioses in both agronomic or non-agronomic ecosystems.