Technical Abstract: Grasses are considered to have originated as understory plants in forests, and from this origin the family developed key characteristics that allowed species to reach a climax association in open habitats. This diversity is due in part to the symbiotic relationship with grazing animals, especially ruminants, the development of the perennial habit, unique intercalary meristem, and the absence of poisonous secondary metabolites. However, fungi are notorious for their production of poisonous secondary compounds, which can serve important functions to grasses. The fungi of concern belong to a relatively small grouping of species within the Clavicipitaceae, and include species of the tribes Balansieae and Clavicipiteae. This group of fungi shares a common feature in being systemically associated with grasses, sedges and rushes as obligate biotrophic parasites. The association of these two groups of fungi with grasses results in the accumulation of several classes of toxic fungal metabolites that are described as defensive. However, these metabolites may have other roles that may be both physiologically and ecologically relevant. This defensive mutualism is presented as a model, along with mycotoxins in general, with apparent inter- and intraspecific competition and ecological outcomes described for specific symbioses.