The symbiotic association of endophyte fungus, Neotyphodium lolii, and ryegrass improves the ryegrass resistance to drought. This is shown by a 30 % increase in the number of suckers in infected plants (E+), compared to plants lacking endophyte (E-), and by a higher water potential in the E+ than E- plants. The E+ plants have higher stomatal conductance (gs), transpiration rate, net photosynthetic rate (PN), and photorespiratory electron transport rate than the E- plants. The maximal photochemical efficiency (Fv/Fm) and the actual photochemical efficiency (ΦPS2) are not affected by the endophyte fungus. The increase in PN of the E+ plants subjected to water stress was independent from internal CO2 concentration. An increased PN was observed in E+ plants also in optimal water supply. Hence the drought resistance of E+ plants results in increased gs, PN, and photorespiratory electron transport rate. and C. Amalric ... [et al.].