In a tropical rainforest, 10,000 or more fungal spores may land on a single leaf each day. Some are plant pathogens, some do not affect the plant at all, and some invade the plant in a beneficial way. Fungi that live within aboveground parts of plants without causing obvious deleterious symptoms are called endophytic fungi. Recent research has shown that endophytic fungi are abundant in plants in all terrestrial environments.

Among the grasses, individual plants with endophytic fungi are more resistant to pathogens and to insect and mammalian herbivores than are plants lacking endophytes. The fungi produce alkaloids (nitrogen-containing compounds) that are toxic to animals. The alkaloids do not harm the host plant. In fact, some plants produce alkaloids (such as nicotine) themselves. The fungal alkaloids also increase the ability of grasses to resist stress of various types, including drought (water shortage) and salty soils. Such resistance is beneficial for some crops, although it can produce toxicity for grazing animals.

The role, if any, of endophytic fungi in most broad-leaved plants is unclear. They may convey protection against pathogens, or they may simply occupy space within leaves without conferring any benefit, but also without doing harm. The benefit, in fact, might be all for the fungus.