Many cool-season grasses harbor fungal endophytes in the genus Neotyphodium, which enhance host fitness, but some also produce metabolites--such as ergovaline--believed to cause livestock toxicoses. In Claviceps species the first step in ergot alkaloid biosynthesis is thought to be dimethylallyltryptophan (DMAT) synthase, encoded by dmaW, previously cloned from Claviceps fusiformis. Here we report the cloning and characterization of dmaW from Neotyphodium sp. isolate Lp1, an endophyte of perennial ryegrass (Lolium perenne). The gene was then disrupted, and the mutant failed to produce any detectable ergovaline or simpler ergot and clavine alkaloids. The disruption was complemented with the C. fusiformis gene, which restored ergovaline production. Thus, the biosynthetic role of DMAT synthase was confirmed, and a mutant was generated for future studies of the ecological and agricultural importance of ergot alkaloids in endophytes of grasses.