Germinating ascospores of Phaeocryptopus gaeumannii produce suprastomatal appressoria from which penetration pegs enter needles. Initial infection occurs between late May and early Jul and coincides with budbreak and shoot elongation. Colonization within needles is exclusively intercellular and increases continuously during Jul-May. No intracellular hyphae or haustoria were observed, but hyphae closely appressed to mesophyll and palisade cell walls are abundant by 3-5 mo after initial infection. Pseudothecial primordia begin to form in epistomatal chambers Oct-Apr, 4-9 mo after initial infection. Pseudothecial primordia developing in the epistomatal chamber are connected to the endophytic thallus by specialized cells in the substomatal chamber that have thickened apical walls and resemble phialides but are not involved in asexual reproduction. The apical wall thickenings instead appear to function as reinforcement against the turgor pressure of the guard cells, allowing cytoplasmic continuity to be maintained between the developing pseudothecium and vegetative hyphae within the needle. Concurrent with the formation of pseudothecial primorida, epiphytic hyphae emerge from the periphery of developing pseudothecia, grow across the needle surface, form numerous anastomoses and reenter the needle by producing appressoria above unoccupied stomata. Epiphytic hyphae and their associated appressoria gradually become more abundant during Oct-Jan.