Previous research has implicated an endophytic fungus as being associated with fescue toxicity (summer syndrome) in cattle grazing Kentucky 31 tall fescue (Festuca arundinacea Schreb.) pastures. Hay and seed were harvested from Kentucky 31 pastures known to be either fungus-free or heavily infested with an endophytic fungus identified as Acremonium coenophialum Morgan-Jones and Gams. Four diets containing either 60% fungus-free seed, 60% fungus-infested seed, 85% fungus-free hay or 85% fungus-infested hay were group-fed to three steers each (avg wt 239 kg) in a 53-d feeding trial. Presence of the fungus reduced (P less than .05) daily gains (kg/d) in steers fed either the seed diets (.96 vs .20) or the hay diets (.66 vs .28). Feed intake was depressed 36% for the seed diets and 8% for the hay diets when the fungus was present. Rectal temperatures were elevated .6 C (P less than .05) for both groups receiving diets containing the fungus, but respiration rate was elevated only in the fungus-infested seed group. In vitro dry matter disappearance was not decreased by presence of the fungus. Steers receiving fungus from either seed or hay were nervous and highly excitable, which resulted in large variations in plasma epinephrine and norepinephrine concentrations. The results of this experiment further implicate an endophytic fungus as being associated with fescue toxicity.