Epichloid fungal endophytes (Epichloë and Neotyphodium spp.) are excellent model systems for studying speciation processes because of their variable life history traits that are linked to host grass fitness. Presumed jumps to new hosts and subsequent somatic hybridizations appear to be common among epichloid endophytes resulting in increased genetic variation upon which selection can act and speciation be initiated. In this study, we explored the endophyte diversity of a rare European native woodland grass species, Hordelymus europaeus, along a latitudinal transect covering the entire distribution range of H. europaeus. From 28 populations in six countries, isolates were sampled and molecularly characterized. Based on the sequences of tubB and tefA, six distinct epichloid taxa (interspecific hybrid or cryptic haploid species) were found, of which four were novel and two have been previously reported from this host. Of the novel endophytes, two were presumed to be interspecific hybrids and two of nonhybrid origin. While previously known endophytes of H. europaeus are seed-born and strictly asexual, one of the novel nonhybrid endophytes found in the glacial refugium of the Apennine peninsula reproduced sexually in cultured plants. This is the first case of a seed-borne, but sexually reproducing endophyte of this host. We discuss the origin, and possible ancestral species, of the six epichloid taxa using phylogenetic analyses. Repeated host jumps and somatic hybridizations characterize the diversity of the endophytes. To date, no other grass species is known to host a larger diversity of endophytes than H. europaeus.