Epichloë festucae (Ascomycota) infects the grass Festuca rubra. Infected plants may be more resistant to herbivores and obtain other benefits. The 5109bp dsRNA genome of a virus which infects E. festucae was sequenced, and its incidence in natural populations and transmission were studied. The viral genome has characteristics of the family Totiviridae. Its two ORFs are overlapped by four nucleotides; ORF1 codes a 765 amino acid putative coat protein (CP); ORF2 is in a -1 frameshift with respect to ORF1, and codes a 826 amino acid RNA dependent RNA polymerase (RdRp). This virus, denominated Epichloë festucae virus 1 (EfV1), is closely related to members of the genus Totivirus which infect filamentous fungi, as deduced from phylogenetic analyses of CPs and RdRps. In two natural populations of Epichloë festucae, 36.4% of the isolates were infected by EfV1. The virus was efficiently transmitted to asexual fungal spores. However, when ascospore progeny of matings between virus-free and infected strains was analyzed, it was found that the virus was not transmitted to progeny of sexual spores.