Symbiotic association of epichloae endophytes (Epichloë/Neotyphodium species) with cool-season grasses of the subfamily Pooideae confers bioprotective benefits to the host plants against abiotic and biotic stresses. While the production of fungal bioprotective metabolites is a well-studied mechanism of host protection from insect herbivory, little is known about the antibiosis mechanism against grass pathogens by the mutualistic endophyte. In this study, an Epichloë festucae mutant defective in antimicrobial substance production was isolated by a mutagenesis approach. In an isolated mutant that had lost antifungal activity, the exogenous DNA fragment was integrated into the promoter region of the vibA gene, encoding a homologue of the transcription factor VIB-1. VIB-1 in Neurospora crassa is a regulator of genes essential in vegetative incompatibility and promotion of cell death. Here we show that deletion of the vibA gene severely affected the antifungal activity of the mutant against the test pathogen Drechslera erythrospila. Further analyses showed that overexpressing vibA enhanced the antifungal activity of the wild-type isolate against test pathogens. Transformants overexpressing vibA showed an inhibitory activity on test pathogens that the wildtype isolate could not. Moreover, overexpressing vibA in a nonantifungal E. festucae wild-type Fl1 isolate enabled the transformant to inhibit the mycelial and spore germination of D. erythrospila. These results demonstrate that enhanced expression of vibA is sufficient for a nonantifungal isolate to obtain antifungal activity, implicating the critical role of VibA in antifungal compound production by epichloae endophytes. E pichloae endophytes (holomorphic Epichloë and anamorphic Neotyphodium) are clavicipitaceous fungi that maintain a systemic and constitutive symbiotic relationship with a broad spectrum of cool-season grasses of the subfamily Pooideae (1). In the mutualistic relationship between epichloae endophytes and coolseason grasses, the reported benefits include protection of the host plant from insect and vertebrate herbivores (2-5), resistance to diseases (6-9), and an increase in tolerance to abiotic stresses, such as drought (10, 11). The protective ability of some epichloae species makes them suitable agents of biological plant protection against economically important grass diseases and insect and small animal herbivores (12). This encouraged breeders to develop and eventually led to the release of "endophyte-enhanced" turfgrass and perennial ryegrass cultivars (13).The production and release of anti-insect metabolites are among the known mechanisms for how epichloae endophytes protect their hosts from insect herbivory. Epichloae endophytes in association with their grass hosts are noted to synthesize bioprotective alkaloids, such as peramine and lolines, and another class of compound, the janthitrems, which increase resistance of the plant hosts to insect feeding (2, 14-16). Moreover, the genetic basis of the biosynthesis of endophyte-derived anti-in...