According to the results presented in this paper the fungal endophyte Epichloë typhina significantly improves the growth, PSII photochemistry and C assimilation efficiency of its host Dactylis glomerata. In this paper, we present a comprehensive study of the impact of the endophytic fungi Epichloë typhina on its plant hosts' photosynthesis apparatus. Chlorophyll a fluorescence, gas exchange, immuno-blotting and spectrophotometric measurements were employed to assess photosynthetic performance, changes in pigment content and mechanisms associated with light harvesting, carbon assimilation and energy distribution in Dactylis glomerata colonized with Epichloë typhina. According to the results presented in this study, colonization of D. glomerata results in improved photosynthesis efficiency. Additionally, we propose a new mechanism allowing plants to cope with the withdrawal of a significant fraction of its energy resources by the endophytic fungi. The abundance of LHCI, LHCII proteins as well as chlorophyll b was significantly higher in E+ plants. Malate export out of the chloroplast was shown to be increased in colonized plants. To our knowledge, we are the first to report this phenomenon. Epichloë colonization improved PSII photochemistry and C assimilation efficiency. Elevated energy demands of E+ D. glomerata plants are met by increasing the rate of carbon assimilation and PSII photochemistry.