The ecological consequences of hybridization of microbial symbionts are largely unknown. We tested the hypothesis that hybridization of microbial symbionts of plants can negatively affect performance of herbivores and their natural enemies. In addition, we studied the effects of hybridization of these symbionts on feeding preference of herbivores and their natural enemies. We used Arizona fescue as the host-plant, Neotyphodium endophytes as symbionts, the bird cherry–oat aphid as the herbivore and the pink spotted ladybird beetle as the predator in controlled experiments. Neither endophyte infection (infected or not infected) nor hybrid status (hybrid and non-hybrid infection) affected aphid reproduction, proportion of winged forms in the aphid populations, aphid host-plant preference or body mass of the ladybirds. However, development of ladybird larvae was delayed when fed with aphids grown on hybrid (H+) endophyte infected grasses compared to larvae fed with aphids from non-hybrid (NH+) infected grasses, non-hybrid, endophyte-removed grasses (NH−) and hybrid, endophyte-removed (H−) grasses. Furthermore, adult beetles were more likely to choose all other types of grasses harboring aphids rather than H+ infected grasses. In addition, development of ladybirds was delayed when fed with aphids from naturally uninfected (E−) grasses compared to ladybirds that were fed with aphids from NH+ and NH− grasses. Our results suggest that hybridization of microbial symbionts may negatively affect generalist predators such as the pink spotted ladybird and protect herbivores like the bird cherry–oat aphids from predation even though the direct effects on herbivores are not evident.