Epichloë typhina is a biotrophic symbiont of grasses with its sexual state on immature host inflorescences. The ectophytic, presexual structure (stroma) of E. typhina produces spermatia and also serves as the female structure in mating. After fertilization there is proliferation of a dense mycelium which has been suggested to be heterokaryotic. Perithecia form in the thickened stroma. We investigated the possible formation of heterokaryons in matings and the role of ascospores in contagious spread of E. typhina. In almost all instances the transfer to a stroma of spermatia of opposite mating type leads to thickening of the stroma; however, ascospores were produced only if the parents were of the same mating population. Fertilization of part of a stroma by one spermatial parent often inhibited fertilization by another strain elsewhere on the stroma depending upon the spermatial isolates used. Tests for heterokaryon formation were performed by culturing stromata after matings that produced no ascospores, to avoid analysing meiotic products. In two instances the female was cultured, and in two the nuclear and mitochondrial haplotypes were primarily of the male. In another instance mitochondrial haplotypes and mitochondrial plasmids from the female became associated with the male nuclear haplotype. These results suggest that, following mating, male hyphae proliferate and heterokaryons may sometimes form and also proliferate. To test how ascospores mediate infection, inflorescences of uninfected perennial ryegrass plants were surrounded by fertilized stromata from which E. typhina ascospores were being ejected, seeds were collected and grown, newly infected progeny plants were identified, and isolates from five progeny plants were analysed genetically. As expected for ascospore progeny the rDNA haplotype of the stromal and spermatial parents had segregated, whereas all five isolates had the stromal profile of mitochondrial DNA. This observation demonstrated that ascospores mediate infection of new host plants.