Background and Aims Neotyphodium lolii is a fungal endophyte of perennial ryegrass (Lolium perenne), improving grass fitness through production of bioactive alkaloids. Neotyphodium species can also affect growth and physiology of their host grasses (family Poaceae, sub-family Pooideae), but little is known about the mechanisms. This study examined the effect of N. lolii on net photosynthesis (Pn) and growth rates in ryegrass genotypes differing in endophyte concentration in all leaf tissues. Methods Plants from two ryegrass genotypes, Nui D and Nui UIV, infected with N. lolii (E+) differing approx. 2-fold in endophyte concentration or uninfected clones thereof (E ) were grown in a controlled environment. For each genotype Â· endophyte treatment, plant growth rates were assessed as tillering and leaf extension rates, and the light response of Pn, dark respiration and transpiration measured in leaves of young (30'45 d old) and old (>90 d old) plants with a single-chamber open infrared gas-exchange system. Key Results Neotyphodium lolii affected CO2-limited rates of Pn, which were approx. 17% lower in E+ than E plants (P < 0 05) in the young plants. Apparent photon yield and dark respiration were unaffected by the endophyte (P > 0 05). Neotyphodium lolii also decreased transpiration (P < 0 05), but only in complete darkness. There were no endophyte effects on Pn in the old plants (P > 0 05). E+ plants grew faster immediately after replanting (P < 0 05), but had approx. 10%lower growth rates during mid-log growth (P < 0 05) than E plants, but there was no effect on final plant biomass (P > 0 05). The endophyte effects on Pn and growth tended to be more pronounced in Nui UIV, despite having a lower endophyte concentration than Nui D. Conclusions Neotyphodium lolii affects CO2 fixation, but not light interception and photochemistry of Pn. The impact of N. lolii on plant growth and photosynthesis is independent of endophyte concentration in the plant, suggestingthat the endophyte mycelium is not simply an energy drain to the plant. However, the endophyte effects on Pn and plant growth are strongly dependent on the plant growth phase.