Endophytic fungi in pasture grasses produce alkaloids which affect invertebrate and vertebrate herbivores. While the competence to produce an alkaloid is a property of the fungus, the host plant may moderate fungal activity. Host genetic influence on endophyte activity was studied in perennial ryegrass (Lolium perenne L.) infected with a common strain of Neotyphodium lolii (Latch, Christensen & Samuels) Glenn, Bacon & Hanlin. Progeny seedling families of a partial diallel cross and their 12 parent clones were compared in a glasshouse experiment. Peramine and ergovaline concentrations were determined by high pressure liquid chromatography (HPLC), and intensity of endophyte infection was determined by enzyme-linked immunosorbent assay (ELISA). Concentrations of peramine and ergovaline and the amount of endophyte mycelium in plants varied between families, consistently across two glasshouse cells and (for the HPLC data) two harvests. There was no indication of any maternal effects. Host genetic control was evident in significant general combining ability effects and smaller specific combining ability effects. Parent-progeny correlation coefficients were high, and narrow-sense heritability was estimated as 0.70, 0.72, and 0.58 respectively for ergovaline, peramine, and ELISA. Further analysis indicated little interaction between loci, and no directional dominance. The three traits were correlated, indicating that 41 and 65% of the genetically controlled variation in ergovaline and peramine concentrations, respectively, was a function of mycelial mass. However, there were departures from these relationships. Host plant selection may enable development of pastures with controlled low levels of toxic but ecologically beneficial endophyte metabolites.