Achnatherum sibiricum (Poaceae) is a perennial bunchgrass native to the Inner Mongolia Steppe of China. This grass is commonly infected by epichloë endophytes with high-infection frequencies. Previously, we identified two predominant Neotyphodium spp., N. sibiricum and N. gansuense. In the present study, genetic diversity and structure were analyzed for the two predominant Neotyphodium spp. as well as the host grass. We obtained 103 fungal isolates from five populations; 33 were identified as N. sibiricum and 61 as N. gansuense. All populations hosted both endophytic species, but genetic variation was much higher for N. gansuense than for N. sibiricum. The majority of fungal isolates were haploid, and 13% of them were heterozygous at one SSR locus, suggesting hybrid origins of those isolates. Significant linkage disequilibrium of fungal SSR loci suggested that both fungal species primarily propagate by clonal growth through plant seeds, whereas variation in genetic diversity and the presence of hybrids in both endophytic species revealed that although clonal propagation was prevalent, occasional recombination might also occur. By comparing genetic differentiation among populations, we found around 4-7-fold greater differentiation of endophyte populations than host populations, implying more restricted gene flow of endophytes than hosts. We proposed that endophyte infection of A. sibiricum might confer the host some selective advantages under certain conditions, which could help to maintain high-endophyte-infection frequencies in host populations, even when their gene flows do not match each other. Furthermore, we suggested that the same genotype of endophyte as well as host should be confirmed if the objective of the study is to know the influence of endophyte or host genotype on their symbiotic relationship, instead of just considering whether the plant is infected by an endophyte or not, since endophytes from the same host species could exhibit high levels of genetic diversity, which is likely to influence the outcome of their symbiotic relationship.