Field plots were established in autumn 1992 in which endophyte [Neotyphodium coenophialum Glenn. Bacon, Price and Hanlin (formerly Acremonium coenophialum)]-infected (E+) and endophyte-free (E−) isolines of three tall fescue [Festuca arundinacea Schreb.) genotypes were planted. Plants were subjected to three water-withholding periods in 1993 and one in 1994, or were kept well watered throughout the experiment. There were no consistent endophyte effects for leaf elongation, tiller density or dry weight per tiller. There were genotype X endophyte interactions (P<001) for tiller density and shoot dry weight per area and genotype X water X endophyte interactions (P<005) for cumulative leaf elongation in 1993. These interactions indicated the highly specific effect of host genotype-endophyte association on the expression of plant growth. Leaf rolling in the stressed treatments was more severe in E− than in E+ plants in 1993, but there were no differences in 1994, and stomatal conductance tended to be lower in E− than in E+ plants in 1993. Fractional water content of the lower 3 cm of the youngest fully developed leaf sheath was usually greater, and never less, in E+ than in E− plants. The leaf rolling and stomatal conductance results suggest that E− plants were more severely stressed in the summer after planting. Thus, the endophyte may induce greater water retention in the leaf sheath and therefore better protect the internal growing zone from lethal desiccation.